All articles tagged with #hedge
The surge in silver and gold prices signals growing investor concern about economic and political instability in the U.S., leading to a shift away from the dollar as a safe haven and increasing reliance on precious metals as protective assets, which could indicate potential economic risks ahead.
Gold prices are reaching new highs, and the article discusses a strategy to hedge against a potential decline in gold prices, emphasizing the importance of risk management in precious metals investing.
Gold prices have surged to new record highs, driven by fears of inflation, geopolitical instability, and economic uncertainty, making it a key hedge alongside the stock market's record peaks. Despite a positive correlation in recent times, gold is traditionally seen as a low-correlation asset, and its rise reflects concerns over fiscal stability and dollar de-dollarization. Market analysts warn of potential corrections as both gold and stocks appear overbought amid ongoing global and domestic uncertainties.
Goldman Sachs suggests using gold as a hedge, emphasizing its role in protecting investments during economic uncertainty.
Gold prices have surged dramatically, rising $420 in four weeks to $3,747, signaling deep concerns about the stability of the global order, economic policies, and geopolitical tensions. The rally reflects fears of a breakdown in traditional financial and social norms, making gold a hedge against uncertain and potentially dark future developments, with targets potentially reaching $4,000 or higher.
Investors are considering hedging their positions in chip stocks like Nvidia as some profit-taking continues, potentially impacting the stock market.
D.R. Horton's stock plummeted 9.2% after revealing a $65 million mark-to-market charge for a hedge gone awry due to the unexpected costs of mortgage-rate buydowns, on top of regular buydown costs, caused by the massive swing in mortgage rates during the quarter. The company increased the use of buydowns, with 70% of its deals made with mortgage-rate buydowns in Q4, and plans to continue using them to stay competitive. The plunge in mortgage rates in November and December caused the company's hedges on those buydowns to lose market value, triggering the charge.
This article discusses the strategy of using options as a hedge in case the Santa rally in the stock market fails to continue. It emphasizes the importance of analyzing market data and provides insights into the potential benefits of options trading.
Ben Mackovak, an investor, sees an opportunity in the 30-year Treasury strip, one of the worst-performing bonds in U.S. history. He purchased the bonds at a discount and is betting on a hard landing in the U.S. and lower interest rates from the Federal Reserve within the next two years. Mackovak views this investment as a hedge to his equity exposure and believes it can potentially make a lot of money if there is a hard landing or if long-term rates go down. Despite the bond's poor performance, Mackovak sees a positive risk-free return and is willing to hold onto the trade even if the Fed hikes further.
Morgan Stanley Wealth Management's CIO, Lisa Shalett, suggests that investors should consider buying US Treasurys as a hedge against high-priced stocks amid rising bond yields and a potential slowdown in the equity-market rally. Shalett believes that bonds have become more attractive in recent weeks and could offer decent capital gains potential. With bond yields rising above 4% and concerns about the Federal Reserve's interest rate policy, investors may find bonds more appealing due to similar returns at a lower risk level. Shalett advises investors to consider hedges for their high-priced stocks in case the optimistic scenario of sustained economic growth and low inflation doesn't materialize.
Billionaire investor Bill Ackman is shorting 30-year U.S. Treasurys as a hedge against the impact of long-term rates on stocks in a world with persistent 3% inflation. Ackman believes this to be one of the few macro investments that still offer reasonably asymmetric payoffs. He argues that if U.S. inflation remains at 3% in the long term, 30-year Treasury yields could hit 5.5% soon. Ackman points to factors such as de-globalization, higher defense costs, the energy transition, growing entitlements, and political divisiveness as reasons for higher long-term inflation. He also anticipates the ending of yield curve control in Japan to increase the appeal of Japanese government bonds over U.S. Treasurys.
The cost of protecting against a stock market sell-off is currently at its lowest since 2008, according to Bank of America. Low equity volatility and high interest rates have driven down the price of S&P 500 put options, making it a bargain for investors looking to hedge against potential market weakness. Despite the recent rally in US stocks, concerns over high interest rates, stretched valuations, and recession risks have prompted investors to consider buying these options at the current low prices.
Cathie Wood, CEO of Ark Invest, predicts that Bitcoin could reach $1.5 million per coin, citing her firm's internal analysis and increased confidence due to the regional bank crisis. Wood also discusses the performance of her primary ETF, Ark Innovation, and the positive inflows experienced by Ark funds since July. She expresses optimism for Coinbase and reallocates some of her stake towards "laggards" like genomic companies and Teradyne, while emphasizing Bitcoin's role as a hedge against counterparty risk.
Bitcoin's options market is showing a bias for weakness over six months for the first time since early March as the US debt ceiling drama continues. The development is consistent with the recent flows in the S&P 500 market that show traders paying up for put volatility. Traders in crypto and traditional markets are starting to hedge against the US debt ceiling risks, considering Congress is struggling to raise the $31.4 trillion borrowing limit with less than a week until the government runs out of money to meet obligations.
Options traders are placing bets against First Republic, PacWest, and other regional banks ahead of the Federal Reserve's interest-rate decision. First Republic saw a surge in put options trading, with nearly three-fourths of trades being put options. PacWest and Western Alliance also saw record options days, with the SPDR S&P Regional Banking ETF seeing its second-highest daily option volume.