Hedge funds were caught offside by the US stock market rally:
The US hedge fund long/short ratio has fallen below 2.0, even lower than during the 2025 April sell-off. This is despite equities trading near record highs. This comes as last week saw the largest net sales by hedge funds year-to-date, driven by long sales concentrated in US Tech Hardware and short additions focused on US Software. By comparison, the ratio was as high as 2.5 in December last year. Furthermore, retail investors recorded their largest weekly outflows year-to-date, driven by semiconductors, according to UBS. Source: UBS, Global Markets Investor
Michael Burry just called the bottom on software stocks
He opened a new 3.5% position in PayPal $PYPL at $49.38 yesterday And is adding Salesforce $CRM and MSCI $MSCI this morning, per his Substack. His recent purchases: • PayPal $PYPL • Fiserv $FISV • Adobe $ADBE • Autodesk $ADSK • Veeva $VEEV Source: Michael Burry Stock Tracker
The Nasdaq-100 is up 12 days in a row - something it hasn't done since July 2017...and has only surpassed this length of win-streak, four times in its history...
Source: zerohedge
The S&P 500's rally has likely been driven by short covering and positioning adjustments as opposed to fresh capital, according to LPL Financial.
"Trading volume has been notably light, running below its year‑to‑date average for each of the past five sessions despite the advance in headline indices," Kristian Kerr, head of macro strategy at the wealth management firm, wrote in a note on Thursday. "This suggests the move higher is being propelled more by short covering and forced positioning adjustments than by fresh capital being put to work." Source: Neil Sethi
The cheapest bubble ever? Nasdaq trades at 22x next 12M earnings, which below 5Y and 10Y average.
Bill Ackman believes "some of the best businesses in the world have become available at some of the lowest valuations in their history." Some examples: 1. $META – Meta Platforms - FWD P/E: 22x - Revenue: +30% YoY 2. $AMZN - Amazon Inc. - EV/EBITDA: 16x - Revenue: +14% YoY 3. $V - Visa Inc. - FWD P/E: 23x - Revenue: +15% YoY 4. $MSFT - Microsoft Inc. - FWD P/E: 22x - Revenue: +17% YoY 5. $UBER - Uber Technologies - P/FCF: 16x - Revenue: +20% YoY (These are NOT investment recommendations) Source: Bloomberg, Citadel,
Monster squeeze won't stop: most shorted stocks up 24% since March 30
Source: zerohedge
Hedge funds started off April with a strong recovery following March’s losses
-Point72 gained 2.4% through April 9, bringing YTD gains to 6.3% -Millenium gained 2.3% through April 10, bringing YTD gains to 3.2% -Jain Global gained 2.4%, through April 10, down 2.7% YTD -Verition gained 2.4% through April 10 Source: Negligible Capital
This could be among the reasons the market rallied yesterday
NEW YORK TIMES: Iran offered to suspend their nuclear enrichment program for 5 years. JD Vance asked for 20. While Trump rejected the 5 year offer, a second round of talks are likely, potentially in Pakistan again, by the end of this week. ⚠️ Why is this BULLISH? The fact that Iran even offered a 5-year suspension means they are WILLING to talk. The US obviously wants more years, but all the market cares about is that a deal is reached. Maybe we settle at 10 years, maybe 20. The point is…this might now become a question of WHEN a deal is reached vs. IF it is reached. Seems like that’s what the market priced in yesterday as well as we went up 1% and continued the best stretch of momentum since October 2025. Source: amitisinvesting
