"Shorts" out of season
Dear clients,
The sharp drop in U.S. stocks this year has boosted the returns of shortists, who may finally be celebrating their first annual gain since 2018, thanks in part to betting on Tesla, Amazon and other mega-cap stocks that have been building markets for years.
According to S3 Partners, an analytics firm, short sellers — investors who bet on a company’s share price to fall — generated $303.7 billion in realized and unrealized profits in 2022. This is four times more than in 2018, their last profitable year.
The most attractive shorts were Amazon, Meta Platforms, Apple Inc and used car dealer Carvana Co. Tesla's collapse was especially helpful for shorts. The S&P 500 fell nearly 19% on its way to its biggest annual percentage decline since 2008 after the Fed's rate hikes dried up risk appetite.
According to experts, this year was favorable for shorting, as the economic environment stood against the entire market. For years, short positions just didn't work.
Not all short strategies have worked out this year, however. According to data provider HFR, hedge funds that bet on rising or falling stock prices lost 9.7% in November.
Recent years for the "bears" were quite difficult. The anti-covid measures of 2020 brought a loss of $241.7 billion, and in 2021 the shorts lost another $142.4 billion when big rallies in meme stocks like GameStop hurt firms that were betting against such companies.
Gold for the Win
Dear clients,
Gold prices rose above $1,800 an ounce as China lifted lockdown measures and inflation in the US decline. The metal returned to July levels, having won back a two-year minimum of September.
Gold is up more than 9% this quarter on the back of a dollar retreat and hopes that the Fed will slow down its aggressive monetary tightening.
Markets cheered up after Friday's data from the US, which indicated lower inflation and consumer spending, which could dampen the need for further rate hikes. A positive signal was the steps taken by the largest consumer of gold, China, to fully return to the market.
The best gift for a trader is profit, so why wait for the New Year — use the drawdown bonus 123% now!
Looking for the best strategies for the cryptotrading
Dear clients,
As cryptomarket has yet to recover for the recent events, it would be unwise to waste the opportunities provided by the turmoil. This time we'll continue the topic of cryptocurrency and pick the best trading strategies.
Join us*on December 28 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.