Morgan Stanley: “This is one of the largest risk-unwinding events in a decade”

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NEW YORK, July 25 (Reuters) – Computer-driven macro hedge fund strategies on Wednesday sold $20 billion in equities and are set to shed at least more $25 billion over the next week after the stock rout, in one of the largest risk-unwinding events in a decade, Morgan Stanley said in commentary to institutional clients on Thursday.
After disappointing earnings reports from Tesla (TSLA.O), opens new tab and Alphabet (GOOGL.O), opens new tab, investors heavily ditched stocks on Wednesday, with the tech-heavy Nasdaq Composite dropping 3.6% in its worst day since October 2022.
“The volatility of the last two weeks started out being very rotational,” said the bank, referring to a recent investors’ rotation to small- from mega caps. “But that has now morphed into a broad index deleveraging (on Wednesday).”

www.reuters.com/markets/us/hedge-flow-macro-hedge-funds-dump-45-bln-equities-says-morgan-stanley-2024-07-25/

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