In the last weeks of 2022, it is predicted that the world’s largest fund managers will sell up to $100 billion in shares.
It is predicted that the world’s largest fund managers, who are expected to reorganize their portfolios to have a 60-40 percent share-bond weight in the last weeks of 2022, will sell up to 100 billion dollars of shares.
Last week, the US Federal Reserve (Fed) increased interest rates by 50 basis points, signaling that although it slowed the pace of tightening, contrary to Wall Street expectations, interest rates could remain high for a more extended period. While this statement deepened the selling pressure in stocks last week, According to JPMorgan and StoneX, bonds will benefit as wealth, pension, and mutual funds realign their portfolios and strengthen their fixed-income positions. In addition, investors see that the yields of the US bonds traded in the market are below the Fed interest rates as an opportunity, and they evaluate that the bond prices are changed at the cheapest level they can be. ,
After last week’s hike, Fed rates rose to the 4.25%-4.50% band and surpassed the highest US bond yield. Over the past week, the sudden intraday rises in bond yields have returned with solid purchases.
This interest in bonds reflects the view that inflation in the markets is likely to peak and fall sharply, even if the Fed is not ready to come to that conclusion. It also points to the expectation that the four-point increase in the policy rate since March has sown the seeds of a recession that will lead to rate cuts in 2024, if not in 2023. On the other hand, expectations for US stocks could be more bright for 2023. Bill Harnisch of Peconic Partners predicted that the S&P 500 index would be stuck in the 3,500-4,400 band in the next 18-36 months.