Monday, March 26, 2012

Hedges Make Wrong-Way Bets for a Fourth Week

Hedge funds wagered the wrong way on commodity prices for a fourth consecutive week, boosting bullish holdings just before reports showing a contraction in manufacturing from China to Europe drove prices lower according to Bloomberg.

The S&P GSCI fell to a three-week low on March 22 after reports showed factory output in Germany and France unexpectedly shrank in March and a measure of China’s manufacturing was the weakest since November. U.S. government data the following day showed purchases of new homes unexpectedly fell last month, increasing investor concerns about the durability of the world’s largest economy.

The MSCI All-Country World Index of shares fell 1.1 percent last week, with about $607 million erased from the value of global equities, according to data compiled by Bloomberg. The dollar retreated 0.6 percent against a basket of six major trading partners, and Treasuries returned 0.4 percent, a Bank of America Corp. index shows.

Learn all about it at http://www.bloomberg.com/news/2012-03-25/hedge-funds-make-wrong-way-bets-for-a-fourth-week-commodities.html

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