Concerns about rising oil prices and an end to the stock market rally once quantitative easing ends has caused 40% of hedge fund managers to be bearish on U.S. equities, up from 26% in January, according to the TrimTabs/BarclayHedge Survey of Hedge Fund Managers. And only 26% are bullish, down from 37%.
Furthermore, 37% are bearish on the 10-year Treasury note, and only 15% are bullish.
“Bullish sentiment less bearish sentiment is negative for the first time since November,” said Sol Waksman, founder and president of
Meanwhile, 18% of managers aim to increase leverage in the near term, and 15% plan to decrease leverage.
“Managers aim to lever up even though they are bearish on both bonds and stocks,” said Vincent Deluard, executive vice president at
In addition, 52% of hedge fund managers believe the stock market has rallied because of QE2, and 35% think that its end in June will cause the rally to stall. In addition, 24% believe it is more likely that oil will hit $150 a barrel than the S&P 500 will reach 1,600.