| | | | Are Hedge Funds Panic Buying, and Where Does the Money Go for US Interest Payments?
The U.S. just hit a new high in interest payments on debt. Where exactly does the money come from? AND maybe more importantly, now that interest payments exceed defense spending, where does the money go?
Come join me as we dive in and see what is moving!
Plus, as always, we have stocks popping and dropping so come find out what is moving this morning as I look for stocks and do some live premarket analysis on SPX, SPY, NDX, QQQ, Russell, IWM and other stocks that are potential plays for the day.
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Hedge Funds Appear to Be Panic Buying. And There’s Serious Money to Be Made
Hedge funds have shifted gears fast — and if you’re paying attention, it looks a lot like panic buying.
After months of net selling that began back in May, hedge funds started dumping single stocks aggressively, expecting a major crash. Net flows were steeply negative, and everyone was bracing for impact.
But starting in October, the script flipped. The market didn’t collapse the way many expected, and now, we’re seeing what feels like a v-bottom in hedge fund activity.
Let’s break it down.
Since June, hedge funds have been operating under the assumption that a massive sell-off was imminent. You can see this reflected in the data — net flows were negative across the board as they dumped single stock exposure.
At first, it was a slow sell-off...
Then, as we hit all-time highs, the selling intensified. But here’s where things get interesting: Despite all this, we haven’t seen the big crash they were betting on.
Now hedge funds have reversed course sharply. While net flows are still negative, they’ve made a strong comeback, and the rate of buying is increasing quickly. This isn’t just a slow grind back up.
It’s aggressive.
We’re talking about a near-panic to get back into the market — almost as if they’re thinking, “What if we don’t get the crash after all?” That’s the fear driving this sudden surge.
It’s important to remember that hedge funds don’t turn on a dime. They’re managing huge accounts — think cruise ship-sized portfolios — so when they make a move, it’s deliberate.
This isn’t retail money trickling back in… This is large, institutional players realizing they can’t afford to miss a potential rally.
One more piece to add to the puzzle: 2024 is projected to see the largest amount of share buybacks ever (until next year at least).
Companies are spending big to repurchase their own stock — a strong signal that they think their shares are undervalued or that they’re trying to prop up prices in the face of uncertain times.
The takeaway?
Hedge funds might not have gotten the crash they were bracing for, but they’re making moves now to catch up — fast. This kind of buying can fuel a market rebound, and with record buybacks adding fuel to the fire, we could see prices continue to rise.
But don’t forget — just as quickly as this can rally, it can reverse.
Keep an eye on the flows and adjust your trades accordingly. This is a time to be nimble, but if you play it right, there’s serious money to be made riding this wave.
Today’s Daily Chart Setup: Spire Inc. (SR)
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