Retail Quants May Be the Next Stabilizing Force for Markets
Retail traders using sophisticated quantitative strategies are starting to have a surprising and noticeable impact on financial prices. Many commentators criticize such do-it-yourself investing as the road to disaster for investors and a destabilizing force for markets. In fact, in a world where passive investing is exploding, this is a reassuring counter current that should aid in price discovery and bring some balance to the makeup of the market.
Speaking at the Options Industry Conference recently, Henry Schwartz, vice president of market intelligence at Cboe Global Markets, showed a slide with large volume spikes in zero-day-to-expiration options for the S&P 500 Index caused by small (under 10 contracts) orders. These ultra short-term contracts are popular with retail quantitative traders and now represent the majority of S&P 500 options volume, often exceeding half the total trading in the S&P 500 itself. If there is enough retail quant trading to drive large spikes in volume, these trades may well be affecting the price behavior of the S&P 500. Moreover, if it's happening with the S&P500, it could be happening with other major markets, too.
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Business Insider
30 minutes ago
- Business Insider
'Sell America' is in full force for elite investor Jeffrey Gundlach, who warns of a US debt 'reckoning'
Investor Jeff Gundlach expressed caution over the US debt load in recent remarks. He said the "untenable" debt burden in America is heading for a "reckoning." The so-called "King of Bonds" said his firm is starting to introduce foreign currencies to its funds. Elite investor Jeffrey Gundlach is doubling down on the '" Sell America" trade. The DoubleLine Capital CEO, previously coined as the "King of Bonds," raised concerns about dollar-denominated assets when speaking at the Bloomberg Global Credit Forum on Wednesday. At the core of his comments is growing concern over America's swelling debt load, which is expected to get even bigger if President Donald Trump's " Big Beautiful Bill" eventually passes. "There's an awareness now that the long-term Treasury bond is not a legitimate flight-to-quality asset," Gundlach said, warning that a "reckoning is coming." He's referring to recent volatility in long-dated government bonds, like 30-year Treasurys, which haven't been trading like the sure-thing safe bet they're supposed to be. And Gundlach's firm has been putting its money where its mouth is. The DoubleLine CEO said his firm has been allocating more fund holdings to foreign currencies, and recommended that investors broadly start to think about boosting non-dollar-denominated holdings. Gundlach also sees the tide turning in the global stock market. "Things always take longer than people think, but it's happening in real-time, and the next one will be selective emerging market equities as opposed to the US," Gundlach said. 2 signs of stress Reuters Gundlach highlighted multiple unusual patterns that have been flashing in US markets this year. He sees these as signs that markets are likely concerned about the US debt, and that faith in US assets is starting to fade, he added. The US dollar and stocks. When the S&P 500 falls, the value of the dollar typically moves higher relative to other currencies, Gundlach said. But in April, when the S&P 500 tanked 20% amid the turmoil from Donald Trump's tariffs, the US dollar also weakened in value. The US Dollar Index, which weighs the greenback against a basket of foreign currencies, traded around 97.8 on Thursday, down 9% from levels at the start of the year. US Treasurys. When the Fed cuts interest rates, the 10-year US Treasury yield, which is tied to long-term interest rate expectations in the economy, typically falls. But the 10-year yield has climbed around 74 basis points from its low in September, around the time the Fed issued its first rate cut. "So I think what we have is recognition is that the interest expense for the United States is untenable if we continue running a $2.1 trillion budget deficit and we continue to have sticky interest rates," Gundlach said of the market shifts. Foreign investors have steadily added exposure to the US market over the last 17 years, Gundlach said, noting that the foreign net investment position in the US currently hovered around $25 trillion. "It's not inconceivable that some of the $25 trillion that came in just a couple — not even two decades — could go out," Gundlach said. "You should be thinking about increasing your allocations to non-dollar investments. And it's already working." Where to go if you're "selling America" Gundlach said there were several areas where investors could find safety away from US assets. Gold. Gundlach said he's continued to hold gold when it reached the level around $3,000 an ounce, and that he also holds stakes in gold miners. Previously, he's said that he believes gold could rally to as high as $4,000 an ounce as concerns swirl over tariffs, geopolitical conflict, and rising debt levels in the US. "I think gold is a real asset class. It's no longer for lunatic survivalists and wild speculators," he said. India. Gundlach also said investors should look into Indian assets, suggesting that India could see a similar run-up in economic growth that China has seen over the past three decades. India is riddled with many of the same economic issue China faced 35 years ago, Gundlach said, though be believed many of those issues can be fixed. "I don't know how long it will take, but that's one you buy," he said. Gundlach has consistently sounded the alarm on rising deficits in the US for years, and encouraged investors to pile into safe-havens. But forecasters on Wall Street have cast doubt on the "Sell America" trade, which is hinges on the idea that US will stop outperforming other assets in the world. JPMorgan and Morgan Stanley are among those who have said that they believe US assets will continue to dominate global markets.
Wall Street Journal
36 minutes ago
- Wall Street Journal
Treasury Yields Fall Amid Concerning Labor Data, Mild Inflation
0900 ET – U.S. labor and inflation data deepen a decline in Treasury yields. Weekly jobless claims were unchanged from the previous week's upwardly revised pace, at 248,000. Economists surveyed by WSJ expected 246,000. Continuing claims, a measure of the unemployed population, was 1.96 million, the highest level since November 2021. May's wholesale price inflation was 0.1%, accelerating from April's 0.2% deflation and below consensus of a positive 0.2%. The combination of slower-than-expected inflation and concerning labor data underscores bets that the Fed may need to change its hawkish position. Yields were already declining and fell further after the data. The 10-year Treasury yield is at 4.360% and the two-year at 3.891%. ( @ptrevisani) 0614 GMT – A downside surprise in U.S. CPI data gave only a small boost to Treasurys, probably because tariff-driven price hikes still look imminent, says Capital Economics' James Reilly in a note. That said, these price hikes look discounted in markets, shielding Treasury yields from rising pressure, the senior markets economist says. 'We don't expect much upwards pressure on Treasury yields even as the inflationary impact of tariffs eventually feeds into U.S. consumer prices,' he says. Capital Economics expects core inflation to rise in coming months but it thinks that investors are already braced for a broadly similar outcome on tariffs, he says. (
Yahoo
36 minutes ago
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq edge higher despite renewed tariff threats, Boeing stock slumps
US stocks edged higher on Thursday as more data showed milder inflation pressures, even as President Trump renewed his threat to impose "take it or leave it" tariffs on trading partners. The Dow Jones Industrial Average (^DJI) hovered just above the flatline, as component Boeing (BA) slumped in the wake of a deadly plane crash in India. The S&P 500 (^GSPC) gained roughly 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) also rose about 0.2%. Stocks were little changed after the S&P 500 (^GSPC) snapped this week's run of wins. Investors are adding growing tensions in the Middle East to worries over Trump's trade policy, such as the fragility of the US-China detente. Fresh price data showed a so-far mild impact from Trump's tariff policies, as wholesale inflation increased less than economists expected. The report came after the consumer counterpart showed an easing in price pressures in the wake of Trump's "reciprocal" tariff hikes in April. Further hints that tariffs are sparing inflation could put the Federal Reserve in a tight spot ahead of its policy meeting next week. Bets on interest-rate cuts this year have mounted, but analysts expect officials to maintain their wait-and-see approach to economic data and policy decisions, with September seen as the most likely spot to resume rate cuts. While investor focus is shifting back to the Fed, Wall Street is still closely following the latest twists and turns in Trump's tariff policy in the hunt for clarity. Read more: The latest on Trump's tariffs US trading partners will get letters within a week or two to set their unilateral tariff rates, Trump reiterated on Wednesday, renewing the threat of no-deal hikes. But Treasury Secretary Scott Bessent told Congress it's "highly likely" that countries in trade negotiations with the US will see an extension of the 90-day tariff pause, currently set to expire July 9. Yahoo Finance's Laura Bratton reports: Read more here. Oracle (ORCL) shares jumped 10% early Thursday after the company's fiscal fourth quarter results topped Wall Street's expectations. Oracle's adjusted revenue of $15.9 billion was ahead of the projected $15.6 billion, while its earnings per share of $1.70 surpassed the expected $1.64. The company raised its annual revenue forecast, as it expects strong demand for its AI-related cloud services. "What is clear is that more customers will use the Oracle database to leverage AI," CEO Safra Ada Catz told analysts in a call after the market close Wednesday. "It's been a long wait for people who own the stock because ... they [Oracle] missed the last two quarters, both on the top and the bottom line, despite the fact that they were booking an enormous amount of business," Citizens head of technology equity research Pat Walravens told Yahoo Finance's Julie Hyman on Market Domination Overtime. Analysts at UBS, Cantor Fitzgerald, Deutsche Bank, KeyBanc, and Melius Research raised their price targets on the stock to as high as $240 on Thursday. US stocks pulled back on Thursday as President Trump renewed his threat to impose "take it or leave it" tariffs on trading partners, while Boeing (BA) shares sank in the wake of a deadly crash in India. The Dow Jones Industrial Average (^DJI) fell roughly 0.4%, with component Boeing slumping after the crash of an Air India flight involving a Dreamliner jet. The S&P 500 (^GSPC) dropped 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) also moved 0.3% lower. US trading partners will get letters soon within a week or two that will set their unilateral tariff rates, Trump reiterated on Wednesday. Weekly claims for unemployment benefits remained at their highest level in eight months during the first full week of June while the number of Americans filing for unemployment insurance on an ongoing basis reached the highest level since November 2021 as the US labor market continues to show signs of slowing. Data from the Department of Labor released Thursday morning showed 248,000 initial jobless claims were filed in the week ending June 7, flat from the week prior and above economists' expectations for 242,000. Meanwhile, 1.956 million continuing claims were filed, up from 1.902 million the week prior and the highest level seen since November 2021. Economists see an increase in continuing claims as a sign that those out of work are taking longer to find new jobs. Chime is set to debut on the Nasdaq later today under the ticker symbol CHYM. The digital bank raised $864 million in its IPO, and priced shares at $27 each for a valuation of $11.6 billion. Chime's entrance in the public markets has been viewed as another indicator of whether the IPO market is thawing after a freeze due to tariff-induced uncertainty. Other recent go-publics, like stablecoin issuer Circle (CRCL) and Nvidia-backed CoreWeave (CRWV), saw massive rallies after their IPOs. As my colleague Josh Schafer wrote yesterday, the largest tech stocks are once again leading the market higher, and that enthusiasm has trickled down to newly issued public offerings. In a June 9 research report, Carson Group associate portfolio manager Blake Anderson found that tech IPOs have been outperforming non-tech IPOs, with shares tied to tech IPOs rising an average of 108% from their deal price. Beyond Chime, other closely watched IPO hopefuls in the pipeline include crypto exchange Gemini; buy now, pay later firm Klarna ( AI chipmaker Cerebras ( and medical supplies company Medline. Read more here about the details of Chime's IPO. Bloomberg reports: Read more here. President Trump's Truth Social posts aren't moving markets like they used to, notes Yahoo Finance's Josh Schafer. Stocks barely budged as he posted on Wednesday that a US-China deal was "done" — something that would have swung markets around a month earlier. Instead, stocks found their direction from economic data, Josh reports: Read more here from today's Morning Brief. The dollar (DX=F) fell further on Thursday as concerns grew about US tariffs after President Trump said he would soon tell trading partners about unilateral levies. Bloomberg News reports: Read more here. Boeing stock fell on Thursday by 8% in premarket trading after an Air India aircraft carrying over 200 people crashed minutes after taking off from the western Indian city of Ahmedabad. Aviation tracking site Flightradar24 said the plane was a Boeing 787-8 Dreamliner, one of the most modern passenger aircraft in service. Air India confirmed the plane, which was headed to Gatwick Airport in the UK, crashed in a civilian area near the airport, but has not specified if there are any fatalities. It is still not clear what caused the crash. According to Reuters, Boeing confirmed it was aware of the crash and was working to gather more information. The news comes as the planemaker is trying to rebuild trust relating to the safety of its jets and increase production under new Chief Executive Officer Kelly Orthberg. "There's revised fears of the problems that plagued Boeing aircraft and Boeing itself in recent years," said Chris Beauchamp, analyst at IG Group. Economic data: Producer Price Index (May); Initial jobless claims (week ending June 7) Continuing claims (week ending May 31) Earnings: Adobe (ADBE), Lovesac (LOVE), RH (RH) Here are some of the biggest stories you may have missed overnight and early this morning: Boeing stock slides after plane crashes in India The $11 trillion gap in costing Trump's 'big, beautiful' bill Gundlach: 'Reckoning is coming' for US debt Trump says he will set unilateral tariff rates within weeks Americans flunk on retirement literacy. Here's why it matters. Nvidia, Samsung to take stakes in robot AI startup Skild US long-dated debt faces crucial test in $22 billion auction Oracle stock jumps as AI boosts revenue forecast Here are some top stocks trending on Yahoo Finance in premarket trading: Oracle (ORCL) stock rose 8% in premarket trading on Thursday after the tech company raised its annual forecast, driven by demand for its AI related cloud services. "Oracle's once-stodgy image levels up to 'cloud-native mage,' and the competitive map now looks less like a classic three-player real time strategy and more like a battle-royale with everyone dropping in, looking for compute loot", said Michael Ashley Schulman, partner at Running Point Capital Advisors. GameStop (GME) shares slumped on Thursday by 11% after announcing a convertible notes offering. The press release said: "GameStop intends to use the net proceeds from the offering for general corporate purposes, including making investments in a manner consistent with GameStop's Investment Policy and potential acquisitions." Boeing (BA) stock fell 8% before the bell on Thursday after a plane crashed in India, with more than 200 people on board, near the airport in the country's western city of Ahmedabad. The plane, which was headed to Gatwick airport in the UK, crashed in a civilian area. Oil prices pulled back early Thursday morning, reversing earlier overnight gains as traders assessed a US decision to pull some diplomats out of the Middle East. The decision to reduce staffing in Iraq came after Iran threatened to hit US assets in the region ahead of its talks with the US over nuclear-related activity. Brent crude futures fell to under $69 a barrel, while West Texas Intermediate crude traded below $68 a barrel — both down around 1%. Prices jumped over 4% on Wednesday amid reports of a potential evacuation. Reuters reports: Read more here. Gold (GC=F) rose for a second day in a row as tensions in the Middle East, coupled with Trump's claims of upcoming unilateral tariffs, pushed risk-averse investors toward the haven commodity. Bloomberg reports: Read more here. Yahoo Finance's Laura Bratton reports: Read more here. Oracle (ORCL) shares jumped 10% early Thursday after the company's fiscal fourth quarter results topped Wall Street's expectations. Oracle's adjusted revenue of $15.9 billion was ahead of the projected $15.6 billion, while its earnings per share of $1.70 surpassed the expected $1.64. The company raised its annual revenue forecast, as it expects strong demand for its AI-related cloud services. "What is clear is that more customers will use the Oracle database to leverage AI," CEO Safra Ada Catz told analysts in a call after the market close Wednesday. "It's been a long wait for people who own the stock because ... they [Oracle] missed the last two quarters, both on the top and the bottom line, despite the fact that they were booking an enormous amount of business," Citizens head of technology equity research Pat Walravens told Yahoo Finance's Julie Hyman on Market Domination Overtime. Analysts at UBS, Cantor Fitzgerald, Deutsche Bank, KeyBanc, and Melius Research raised their price targets on the stock to as high as $240 on Thursday. US stocks pulled back on Thursday as President Trump renewed his threat to impose "take it or leave it" tariffs on trading partners, while Boeing (BA) shares sank in the wake of a deadly crash in India. The Dow Jones Industrial Average (^DJI) fell roughly 0.4%, with component Boeing slumping after the crash of an Air India flight involving a Dreamliner jet. The S&P 500 (^GSPC) dropped 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) also moved 0.3% lower. US trading partners will get letters soon within a week or two that will set their unilateral tariff rates, Trump reiterated on Wednesday. Weekly claims for unemployment benefits remained at their highest level in eight months during the first full week of June while the number of Americans filing for unemployment insurance on an ongoing basis reached the highest level since November 2021 as the US labor market continues to show signs of slowing. Data from the Department of Labor released Thursday morning showed 248,000 initial jobless claims were filed in the week ending June 7, flat from the week prior and above economists' expectations for 242,000. Meanwhile, 1.956 million continuing claims were filed, up from 1.902 million the week prior and the highest level seen since November 2021. Economists see an increase in continuing claims as a sign that those out of work are taking longer to find new jobs. Chime is set to debut on the Nasdaq later today under the ticker symbol CHYM. The digital bank raised $864 million in its IPO, and priced shares at $27 each for a valuation of $11.6 billion. Chime's entrance in the public markets has been viewed as another indicator of whether the IPO market is thawing after a freeze due to tariff-induced uncertainty. Other recent go-publics, like stablecoin issuer Circle (CRCL) and Nvidia-backed CoreWeave (CRWV), saw massive rallies after their IPOs. As my colleague Josh Schafer wrote yesterday, the largest tech stocks are once again leading the market higher, and that enthusiasm has trickled down to newly issued public offerings. In a June 9 research report, Carson Group associate portfolio manager Blake Anderson found that tech IPOs have been outperforming non-tech IPOs, with shares tied to tech IPOs rising an average of 108% from their deal price. Beyond Chime, other closely watched IPO hopefuls in the pipeline include crypto exchange Gemini; buy now, pay later firm Klarna ( AI chipmaker Cerebras ( and medical supplies company Medline. Read more here about the details of Chime's IPO. Bloomberg reports: Read more here. President Trump's Truth Social posts aren't moving markets like they used to, notes Yahoo Finance's Josh Schafer. Stocks barely budged as he posted on Wednesday that a US-China deal was "done" — something that would have swung markets around a month earlier. Instead, stocks found their direction from economic data, Josh reports: Read more here from today's Morning Brief. The dollar (DX=F) fell further on Thursday as concerns grew about US tariffs after President Trump said he would soon tell trading partners about unilateral levies. Bloomberg News reports: Read more here. Boeing stock fell on Thursday by 8% in premarket trading after an Air India aircraft carrying over 200 people crashed minutes after taking off from the western Indian city of Ahmedabad. Aviation tracking site Flightradar24 said the plane was a Boeing 787-8 Dreamliner, one of the most modern passenger aircraft in service. Air India confirmed the plane, which was headed to Gatwick Airport in the UK, crashed in a civilian area near the airport, but has not specified if there are any fatalities. It is still not clear what caused the crash. According to Reuters, Boeing confirmed it was aware of the crash and was working to gather more information. The news comes as the planemaker is trying to rebuild trust relating to the safety of its jets and increase production under new Chief Executive Officer Kelly Orthberg. "There's revised fears of the problems that plagued Boeing aircraft and Boeing itself in recent years," said Chris Beauchamp, analyst at IG Group. Economic data: Producer Price Index (May); Initial jobless claims (week ending June 7) Continuing claims (week ending May 31) Earnings: Adobe (ADBE), Lovesac (LOVE), RH (RH) Here are some of the biggest stories you may have missed overnight and early this morning: Boeing stock slides after plane crashes in India The $11 trillion gap in costing Trump's 'big, beautiful' bill Gundlach: 'Reckoning is coming' for US debt Trump says he will set unilateral tariff rates within weeks Americans flunk on retirement literacy. Here's why it matters. Nvidia, Samsung to take stakes in robot AI startup Skild US long-dated debt faces crucial test in $22 billion auction Oracle stock jumps as AI boosts revenue forecast Here are some top stocks trending on Yahoo Finance in premarket trading: Oracle (ORCL) stock rose 8% in premarket trading on Thursday after the tech company raised its annual forecast, driven by demand for its AI related cloud services. "Oracle's once-stodgy image levels up to 'cloud-native mage,' and the competitive map now looks less like a classic three-player real time strategy and more like a battle-royale with everyone dropping in, looking for compute loot", said Michael Ashley Schulman, partner at Running Point Capital Advisors. GameStop (GME) shares slumped on Thursday by 11% after announcing a convertible notes offering. The press release said: "GameStop intends to use the net proceeds from the offering for general corporate purposes, including making investments in a manner consistent with GameStop's Investment Policy and potential acquisitions." Boeing (BA) stock fell 8% before the bell on Thursday after a plane crashed in India, with more than 200 people on board, near the airport in the country's western city of Ahmedabad. The plane, which was headed to Gatwick airport in the UK, crashed in a civilian area. Oil prices pulled back early Thursday morning, reversing earlier overnight gains as traders assessed a US decision to pull some diplomats out of the Middle East. The decision to reduce staffing in Iraq came after Iran threatened to hit US assets in the region ahead of its talks with the US over nuclear-related activity. Brent crude futures fell to under $69 a barrel, while West Texas Intermediate crude traded below $68 a barrel — both down around 1%. Prices jumped over 4% on Wednesday amid reports of a potential evacuation. Reuters reports: Read more here. Gold (GC=F) rose for a second day in a row as tensions in the Middle East, coupled with Trump's claims of upcoming unilateral tariffs, pushed risk-averse investors toward the haven commodity. Bloomberg reports: Read more here. Sign in to access your portfolio
