Weekly round - up

Hedge funds snap up stocks amid “almost no panic” market?

Last week, global hedge funds were net buyers of stocks for the second consecutive week, focusing on 'cyclical' sectors like energy, industrials, and materials. According to a Reuters report citing Goldman Sachs data, hedge funds bet on rising shares in these sectors amid a relatively calm market, with little panic.

Goldman Sachs found that hedge funds were net buyers in 10 out of 11 US sectors, and there was a notable increase in net buying in cyclicals, the most since September 2021. The S&P 500 and Nasdaq both saw gains of 1.37% and 2.31%, with a mega cap rally pushing the S&P 500 above 5,000 for the first time. The report highlighted optimism, especially in bullish options for major tech companies, stating that the equity options market reflects minimal panic. With growth proving more resilient than expected, there is a growing risk of a re-acceleration and momentum unwind.

Former SAC PM teams up with Cohen again at Point72

According to reports , Advisors have once again teamed up with his former boss, joining Point72 Asset Management's capital markets team under Andrew McEntire's leadership. Previously running his own hedge fund, North Fourth Asset Management, Vaccarino will now collaborate with teams across the firm's long short equity strategies.

Brazilian hedge fund Verde looks to smaller Chinese companies amid stock rout?

Luis Stuhlberger, the CEO and CIO of Verde Asset Management, a Sao Paolo based hedge fund overseeing BRL 24 billion ($4.8 billion) and one of Brazil's major independent asset managers, is eyeing smaller Chinese companies. This comes in the wake of the early 2024 selloff in China's stock market, as reported by Bloomberg .

Since its establishment in 1997, Verde's flagship fund has surged by more than 24,300% in terms of local currency after fees, boasting nearly double the annual return of the Ibovespa index. However, in the previous month, the fund experienced a 0.28% decline after fees, lagging behind the 0.97% gain for the CDI rate, the local hedge fund benchmark.

In 2024, Chinese small caps have faced challenges amid growing concerns about the country's economy, despite their popularity among Chinese retail and institutional investors last year. The CSI 1000 Index has dropped by 15% this year, underperforming blue-chip benchmarks. This reflects investors' expectations that efforts to revive the market will prioritize larger firms.