{"id":1428576,"date":"2023-09-21T02:20:00","date_gmt":"2023-09-21T06:20:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1428576"},"modified":"2023-09-21T02:20:00","modified_gmt":"2023-09-21T06:20:00","slug":"hedge-funds-add-china-stock-shorts-even-as-growth-bottoms","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/hedge-funds-add-china-stock-shorts-even-as-growth-bottoms\/1428576\/","title":{"rendered":"Hedge Funds Add China Stock Shorts Even As Growth Bottoms"},"content":{"rendered":"

Hedge Funds Add China Stock Shorts Even As Growth Bottoms<\/span><\/p>\n

\n

By Ye Xie, Bloomberg Markets Live reporter and strategist<\/em><\/p>\n

China\u2019s economy has shown signs of bottoming. Yet that hasn\u2019t prevented hedge funds from boosting their short positions in the stock market once again.<\/p>\n

Wednesday\u2019s market highlight was, of course, the US\u00a0Federal Reserve meeting, which turned out to be more hawkish than markets expected. Officials kept one more rate hike on the table for this year, while raising the median dot for 2024 to 5.1% from 4.6%. <\/strong>The shift in the \u201cmode\u201d \u2013 or the most-frequent\u00a0dot on the plot\u00a0\u2014 is even bigger, marking an increase of 75 bps.<\/p>\n

The projections revealed the Fed\u2019s reaction function: upside growth risks will bring less easing next year, even with steady inflation expectations. In other words, the Fed will raise real yields in respond to stronger growth. That should put a bit more pressure on risky assets and support the dollar, particularly against lower yielding currencies, including the yuan<\/strong>.<\/p>\n

<\/a><\/p>\n

Back in China, recent data showed the economy has stabilized. Capital Economics\u2019 China Activity Proxy Index, an alternative measure to official GDP, suggested annual growth accelerated to 6.1% in August, from 4.3% in the previous month.<\/p>\n

The main bright spot is the industrial sector, with a \u201cstrong upward trend\u201d in freight traffic at the ports and across roads and railways, according to economists\u00a0Sheana Yue\u00a0and\u00a0Julian Evans-Pritchard. While property sales have yet to bottom, a pickup in car sales also pointed to improvement in consumer sentiment.<\/p>\n

Source: Capital Economics<\/em><\/a><\/p>\n

A Standard Chartered survey of\u00a0small and medium enterprises\u00a0also showed improvement, with the headline index edging up for a second consecutive month.<\/p>\n

Yet the markets are sending conflicting signals. The 10-year\u00a0bond yield, arguably one of the best indicators of China\u2019s growth momentum, is trading at the top of its range over the past three months. But the equity market remains under pressure, with\u00a0turnover\u00a0drifting toward the lowest in 2023. <\/strong><\/p>\n

Coincidentally, hedge funds boosted their bearish bets on Chinese and Hong Kong stocks<\/strong>. Short interest has increased this month pretty much across sectors, according to data compiled by Morgan Stanley. Among the prominent names, the pickup in short interest in\u00a0PDD, an e-commerce company, stood out. Outflows from active long-only managers also continued, strategists including\u00a0Gilbert Wong\u00a0wrote in a report.<\/p>\n

Source: Morgan Stanley<\/a><\/p>\n

Apparently, fund managers didn\u2019t get the \u201cChina Recovery\u201d memo.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 09\/20\/2023 – 22:20<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/hedge-funds-add-china-stock-shorts-even-growth-bottoms<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Hedge Funds Add China Stock Shorts Even As Growth Bottoms By Ye Xie, Bloomberg Markets Live reporter and strategist China\u2019s economy has shown signs of…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1428576","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1428576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1428576"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1428576\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1428576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1428576"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1428576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}