Most hedge funds see US stocks falling more in May

[HenryTo]

And I guess here, the logical question to ask is: Are hedge funds a contrarian indicator as a whole? It is interesting to note that only 39% expected the market to slide in April, and as it turned out the month of April was the worst performing month since January 2003.

While the downtrend still remains intact, my guess is that there could be a counter-trend rally here very soon.
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Most hedge funds see US stocks falling more in May

Mon May 2, 2005 05:28 PM ET

BOSTON, May 2 (Reuters) - Most hedge fund managers expect the U.S. stock market to slide further in May after losing ground in April, new study released on Monday shows.

According to the Van Macro Sentiment Indicators, compiled by Van Hedge Fund Advisors International, 63 percent of all polled hedge fund managers expect the Standard & Poor's 500 Index to show more weakness this month. That is up significantly from April when only 39 percent expected the stock market to slide more. April was the worst month for blue chip stocks since January 2003. Only 26 percent of the polled hedge fund managers expect stocks to move higher this month.

At the same time 42 percent of the polled managers expect the dollar to rise this month, while 32 percent have a neutral view. In April, 48 percent expected the dollar to rise.

The survey polls managers who oversee roughly $30 billion in assets in the loosely regulated $1 trillion industry.

Hedge fund managers also expect the benchmark 10-year U.S. Treasury note to rise, with 42 percent reporting a bullish view. In April 48 percent predicted a rise.