In today’s top stories, Apple overtakes Tesla as the most shorted stock on Wall Street, SoftBank considers launching a third Vision Fund and ethereum completes its largest network upgrade. Meanwhile, Ray Dalio sees stocks shrinking 20% if rate hikes continue and Morgan Stanley names its S&P 500 stock picks.
Apple overtakes Tesla as biggest short bet
After 864 days in the top spot, Tesla [TSLA] is no longer Wall Street’s biggest short bet, having been overtaken by Apple [AAPL] on Wednesday. S3 Partners notes that short bets against Apple totalled $18.4bn as of 14 September, while Tesla’s came in at $17.4bn. Both stocks have rallied in recent months, with Apple up 17.1% and Tesla up 40.3% since 14 June.
SoftBank considers launching third fund
Tech investor SoftBank [9984.T] is reportedly considering the launch of a new third startup fund, despite the massive losses incurred by its two existing Vision Funds in recent years. SoftBank announced a record $23bn loss for the June quarter, but the fund expects to generate more cash from the upcoming listing of its semiconductor firm Arm. SoftBank shares closed 0.6% higher on Thursday as investors digested the news.
Ethereum’s network upgrade goes live
In a huge shakeup for the blockchain market, the ethereum network’s largest ever upgrade went live on Thursday. The so-called merge, which has migrated the network to a proof-of-stake system and aims to reduce the currency’s energy consumption by over 99%, was successful and has helped lift the price of ethereum. In response to the long-awaited news, the Global X Blockchain ETF was down 0.78% in early trading on Thursday.
Ray Dalio says stocks could shrink 20%
Bridgewater’s Ray Dalio offered a gloomy forecast in a LinkedIn post following the release of worse-than-expected inflation figures on Tuesday. Dalio suggested that “interest rates will have to rise a lot (toward the higher end of the 4.5% to 6% range)”, which could result in stocks shedding around 20% in value. He also told investors to be wary of long-term inflation remaining high, particularly if there are more economic shocks to come.
S&P 500 could bounce back by year-end
While many were responding to Tuesday’s market meltdown with more pessimism, Morgan Stanley analyst Andrew Slimmon told CNBC that the S&P 500 could make a recovery by the end of the year. Despite consumer discretionary stocks falling amid rising inflation, Slimmon said Home Depot, Fortune Brands Home & Security and Lennar Corporation could be worth watching if the market can shift from fear to greed.
UK energy stocks soar
The share prices of Shell [SHEL.L], Diversified Energy [DEC.L] and Angus Energy [ANGS.L] have performed well in 2022 amid soaring oil and gas prices. While prices have since pulled back over the past couple of weeks, there are still signs profits could remain high for these three UK energy players, especially as the companies are not heavily exposed to the OPEC+ region and therefore less likely to be impacted by the recent production cuts.
Michael Gayed warns of a sovereign debt crisis
In this week’s episode of Opto Sessions, Michael Gayed, a portfolio manager at Toroso Asset Management and author of the critically acclaimed research publication The Lead Lag Report with more than 15 years’ experience, re-joins the show to discuss the “bizarre” market dynamics that are occurring between asset classes amid this year’s downturn. From the volatility in forex to the rising levels of risk in treasures, he provides his expert take on how he’s navigating these market anomalies.