The latest statistic data reveal that hedge funds have taken a bearish stance on the US dollar, marking the first time since March that they've bet against USD. Their shift in sentiment stems from the belief that the Federal Reserve is nearing the end of its interest rate hike cycle. Data by the Commodity Futures Trading Commission indicates that leveraged investors have flipped to a net short position on the US dollar of 20,091 contracts in the week through July 7. This is a significant reversal from the previous week when they held a net long position of 5,196 contracts.
This shift has been driven by signs that the Federal Reserve is approaching the end of its tightening cycle, while other countries have already implemented rate hikes to combat inflation. The latest US employment data revealed a lower-than-expected number of new jobs being created in June, further fueling the confidence of dollar bears who are betting on an earlier policy easing by the central bank.
Some fund managers note that with the peak non-farm payrolls behind us, the future of the US dollar appears increasingly uncertain. Dollar sellers are gaining momentum, and EUR/USD is poised for a retest of its June 22nd high around 1.1012.
Premarket movers
Shares of Advance Auto Parts fell by 2.4% in premarket trading after Atlantic Equities downgraded the stock to "sell" on Monday and lowered the target price to $50, which is 28% below the current price. The statement noted the ongoing lackluster performance of the company, signaling structural challenges and substantial stock losses.
Icahn Enterprises surged by 10% following a report in The Wall Street Journal that Carl Icahn has untied his personal loans from the stock price in response to recent short-seller attacks.
Shares of Meta rose by approximately 1% in premarket trading. According to recent data, the new social media platform Threads has attracted over 100 million users since its launch last Wednesday. CEO Mark Zuckerberg stated last week that the rapid growth has far exceeded expectations.
Shares of Fisker, an electric vehicle manufacturer, edged up by less than 1% after the company announced a $340 million convertible note offering, with the potential to increase it to $680 million. Fisker intends to use the raised capital for general corporate purposes, including battery development and the creation of future products.
Shockwave Medical's stock gained 2.8% after Morgan Stanley upgraded its rating to "buy." The firm expects significant improvement in reimbursement for ambulatory care expenses.
As for the technical picture of the S&P 500, demand for the index has slightly diminished. While buyers still have a chance to sustain the upward momentum, bulls must regain $4,405. A breakout above this level would likely propel the index towards $4,427 and $4,447. An equally important task for bullish traders will be maintaining control over $4,469 and $4,488, which will strengthen the bullish sentiment in the market. However, if risk appetite continues to wane, buyers must firmly establish themselves around the $4,382. A breakout below this level would push the instrument towards $4,357 and pave the way for further decline towards $4,332.