S&P 500 Futures Turn Bullish for First Time Since Mid-2022, Hinting at Stock Market Rebound
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The majority of bets on S&P 500 futures now project stocks will rise rather than fall for the first time since mid-2022, ending the longest bearish stretch since the 1990s.
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The change in sentiment may have predicted last week's rally in U.S. stocks, as net longs only equaled 0.2% of open interest versus 17% net shorts in May.
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The shift to net long positions in late October for the first time in over a year may have foreshadowed last week's 5.9% stock market rally.
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Falling Treasury yields and a weak jobs report raising hopes of less aggressive Fed rate hikes also aided last week's rally.
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Though real-time events can amplify futures market moves, the increased bullishness suggests traders have turned more optimistic on stocks.