hedge funds lost $43 billion as US and European stock markets rose – Kommersant

According to Financial Times (FT), citing calculations by research company S3 Partners, last week alone, hedge funds that took short positions in US and European stock indices lost $43 billion on their bets. It is noted that hedge funds that believed the most that stock indices will decline, when in reality they have risen, lost on bets on shares of technology, medical and consumer companies. And short positions in cruise operator Carnival Corp. alone, whose shares rose 14% last week, missing hedge funds’ expectations, cost them $240 million in losses.

Analysts explain the hedge funds’ miscalculations by the fact that they expected new Fed rate hikes against the backdrop of rising inflation in the United States. However released Last week, inflation data came in below expectations, leading investors to speculate that the Fed is likely to stop raising interest rates. Such investor sentiment led to an increase in quotations of leading companies in the US and Europe in the consumer sector, which suffers most from high inflation, and behind them – stock indices as a whole.

Evgeny Khvostik