Monday, October 22, 2018

"'Enormous Piles Of Cash' Are About To Return To The Market"

This is an interesting tidbit on cash balances from a guy who sees a lot of flow.

The line about the election is less important and possibly wrong. Think about it, whether or not there is a blue wave the money will be going somewhere. The mid-term elections are only a psychological trigger for the fund managers, meaning it is something that the agile (or foolhardy) can frontrun.

I'm not sure it matters but Peterffy is a big-time Repub, a classic escaped-from-communism-and-wants-no-part-of anything-even-hinting-at-it story.

From SafeHaven, Oct. 13:
Tom Peterffy, the billionaire founder of Interactive Brokers, told CNBC Thursday that he may be about to move from bear to bull soon because his customers alone have over $50 billion in cash sitting around and waiting to get back into the market.

But Peterffy—the 57th wealthiest person in the world, according to Bloomberg—isn’t making any sudden transformation. Any bear-to-bull move will have to wait until after mid-term elections, and he’s expecting a Democratic “blue wave”.

With the equities markets taking a beating this week, and many falling in line with Morgan Stanley’s cry of “regime change” and prognosis that we’ve reached the “tipping point” that puts us into bear territory, it’s unsettling when another billionaire broker chimes in with a theory that “enormous piles of cash” are about to return to the market.

Everyone knows the bull run won’t last forever; however, the length of this one is truly nerve-wracking and it’s now all about animal metamorphosis—but it’s hibernating bulls and bears with horns.

Tom Peterffy, the billionaire founder of Interactive Brokers, told CNBC Thursday that he may be about to move from bear to bull soon because his customers alone have over $50 billion in cash sitting around and waiting to get back into the market.

But Peterffy—the 57th wealthiest person in the world, according to Bloomberg—isn’t making any sudden transformation. Any bear-to-bull move will have to wait until after mid-term elections, and he’s expecting a Democratic “blue wave”.

That $50 billion in cash is waiting for the same thing before it dives back into the markets.
From Peterffy’s standpoint, a “blue wave” would likely result in a Chinese government more willing to deal on trade.

“Give me post-midterm and give me another 2 to 3 percent down and I think the market will turn. So, I would not worry,” Peterffy told CNBC.

Nor is he worried about rising interest rates, even with the Fed scheduled to meet twice more this year.

But in the meantime, the markets are more than floundering.

On Thursday, the Dow lost 546 points in another major sell-off. It lost over 1,300 points in just two days. The S&P 500 lost 2.1 percent Thursday, and only the Nasdaq was somewhat spared, closing down 1.3 percent.

So, not everyone will share Peterffy’s optimism—especially when it comes to tech stocks, which are taking a beating precisely because of rising interest rates and fears that these high-flying growth stocks won’t be able to deliver in a market downturn.

Indeed, Guggenheim Partners CIO Scott Minerd told CNBC Wednesday that as the Fed continues to hike interest rates, the stock market will pull back 40 percent from its highs....MORE
If interested see also October 1's ""Billionaire who once built robots to trade goes to war with them" (IBKR)".