Global hedge funds turn bearish toward commodities
August 7, 2024
News Digest:
Global hedge funds are turning bearish towards commodity futures for the first time since 2016, with pessimism growing around essential raw material supplies that could take a hit in case fears of a recession come true.
According to a news report, money managers held net positions of around 58,600 contracts to bet on lower prices for 20 raw materials as of the end of July. The US commodity data revealed that for over eight years now, including the pandemic, investors were bullish on prices. The Bloomberg Commodity Index, which tracks energy, crop, and metals futures, fell 4% in 2024, reversing gains seen earlier this year.
Takeaway:
Meanwhile, another report said hedge funds were also adding bearish equity bets to their portfolios amidst fears of the US economy slowing down faster than expected. According to Goldman Sachs, this is the third consecutive week that hedge funds’ bet on stocks falling outpaced the addition of long positions.