‘Geopolitics, Fed rate cut expectations, Bitcoin driving trading patterns early in 2024’ – Ward

(AI Video Summary)

Discussing trading trends for 2024

In this captivating interview, Pete Ward, Head of Premium Client Sales at IG, talks with IGTV's Angeline Ong about the exciting trends in the trading world in 2024. He begins by mentioning that after the holiday season, clients are back and trading volumes have been better this week. Many clients were waiting for a drop in stock markets after a big increase in October, but to their surprise, there was another 6% increase in December. However, last week, the NASDAQ had five consecutive down days, which indicates a slight return to normalcy in the markets. Now, clients are trying to anticipate what will happen next, with the main focus being on the CPI number.

Clients taking short positions on tech and S&P stocks

Ward admits that some clients were happy about the markets returning to normal, especially those trading indices. However, most clients have taken short positions on technology and S&P stocks, which suggests they might be selling too early in a rising market. He also mentions that their in-house technical analyst predicted correctly that the NASDAQ would rise on Monday, which led to a significant boost in the market.

Interest rate cut predictions

When it comes to interest rate cuts, most traders believe that rates will start to decline, leading to a global easing of monetary policy. However, traders are waiting to see how the markets will react when this data does change. Ward also provides insight into the trading strategies of premium clients. Many clients are selling shares on the NASDAQ and S&P, and at the same time, buying silver and gold. Some clients are uncertain about the oil markets due to increased tensions in the Middle East and higher oil production by Saudi Arabia.

Sector favourites

In terms of sector favorites, consumer-facing businesses like retail are popular among UK clients. However, recent disappointing results from JD Sports Fashion have affected related companies negatively. Bitcoin is also getting attention from clients, with many believing that it will show a significant increase if ETFs (exchange-traded funds) are approved. Despite the market's volatility, clients remain optimistic about the potential of Bitcoin.

Clients use a variety of trading strategies. Some rely on fundamental analysis, some focus on technical analysis, while others make decisions based purely on price movements or intuition. Most clients consider news and important events like non-farm payrolls and GDP data to shape their trading patterns.