U.S. Stock Futures Inch Up after S&P 500, Nasdaq Reach New Peaks
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During Monday's session, the S&P 500 climbed about 0.1% to close above 6,300 for the first time. The Nasdaq jumped 0.4% to a record 20,974.17, fueled by investor optimism ahead of major tech earnings. However, the Dow Jones ended marginally lower.
Investors are now looking ahead to a busy week for second-quarter earnings releases. To date, over 60 S&P 500 companies have reported their earnings, with more than 85% of them beating analysts' estimates. Market participants are awaiting corporate comments about macroeconomic stability, tariff impact, and insights into AI demand and spending.
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Business Insider
10 minutes ago
- Business Insider
'A long, slow bleed': Quant hedge funds are getting slammed and scrambling for answers
Quant hedge fund managers are experiencing one of the most prolonged droughts in recent memory. The bigger concern: They don't know why. Systematic hedge funds have suffered a steady decline since June that managers are struggling to wrap their heads around. Quant executives, portfolio managers, and headhunters working in the space told Business Insider that the turmoil has hit most of the industry, generating concern and intrigue about the source of the pain. "It kinda crept up on everyone as there weren't many disastrous days, but it's been small loss after small loss," said one executive at a quant trading firm, who wasn't authorized to speak publicly. "No one seems to know why this is happening." Qube Research & Technologies, the $28 billion quant firm started by former Credit Suisse traders, has lost 5% in July in its flagship fund through last Friday, a person close to the manager said. The manager's larger Torus fund is down 7% in July, but both strategies are still up double-digits on the year. Point72's Cubist unit has experienced one of its worst stretches since the pandemic slammed global markets in March 2020, two people familiar with the firm said. Two Sigma's Spectrum fund is down roughly 2% this month through the end of last week, a person close to the manager said. At Man Group, the firm's AHL Dimension fund — a multi-asset systematic strategy — was down 2.5% in July through Tuesday, according to the London-based manager's website. Renaissance Technologies' largest external fund was down close to 6% in June, according to HSBC's Hedge Weekly report. These firms declined to comment or did not immediately respond to requests for comment. From the start of June through this Tuesday, equity quant managers lost 4.2%, according to a report from Goldman Sachs' prime services unit. The losses, driven by US equities, are the worst run of performance for systematic long-short strategies since a sharp drop at the end of 2023. Quant distress doesn't necessarily signal broader market trouble, but severe losses can spill over — especially if a large firm dumps positions and sparks contagion. The S&P 500 is up nearly 8% since June, and the VIX — a measure of volatility — is at its lowest point since February. Other prominent hedge fund strategies, including fundamental equity and multi-strategy, have steadily gained over the same period, the report said. Luckily for the quant space, it had been a strong year performance-wise until summer began, so the sector's annual returns are still, on average, outpacing their human rivals. A hallmark of statistical arbitrage, a classic quant trade that wields mathematical models to exploit short-term pricing inefficiencies across large baskets of stocks, istaking positions poised to pay off regardless of broader market swings. It has periodic slumps like any other trade, but they tend to be sharp and quick. Major drawdowns often last just a couple of days and stem from a large player liquidating a portfolio or reducing market exposure. Overcrowding can exacerbate losses, as it did during the so-called Quant Quake, in which systematic hedge funds such as Goldman Sachs' famed quantitative division suffered heavy, sudden losses in August 2007 while the rest of the market rallied. What's unusual this summer, industry sources say, is the accumulation of small losses over weeks. "Everyone says it's different this time — different because of duration," said a hedge fund consultant who works with large quant funds. "This has been a long, slow bleed across the complex." That pattern isn't consistent with a large liquidation and its aftershocks, though losses so far this week have been more intense, including a 0.6% decline on Tuesday, according to Goldman Sachs. The Goldman report said drivers included the sell-off of momentum strategies that bet rising stocks will keep rising; the rally in speculative, high volatility stocks; and "some unwinding of crowded trades." Intense losses could quickly pile up if sizable funds start cutting their exposure. "It's survival of the fittest, basically," said one quant trader at a multi-billion-dollar manager. "Who is going to have the stomach to ride this out and stick to their bets?"
CNBC
10 minutes ago
- CNBC
Best Stocks: A unique financial stock riding the options boom with a chart sent from heaven
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — In 1973, The Chicago Board of Trade launched a subsidiary that would allow traders to place bets on a new standardized contract based on stock prices. These contracts, similar to but separate from the CBOT's bread-and-butter commodity futures products, were called options. They carved out a single trading pit on the floor for these stock option contracts and standardized how they worked. At first, there were options on just sixteen publicly traded companies, like IBM. In due time, more were added. Stocks were extraordinarily volatile in the mid-1970s with back-to-back bear markets and lots of opportunities for both speculation and protecting portfolios. The business was a hit. When the early 1980's bull market got underway, this "Chicago Board Options Exchange" or CBOE (usually pronounced as C-Bow) grew into a hive of trader activity. In 1983, the first contract on a stock market index came along when the CBOE unveiled its S & P 100 options offering. If you've ever seen the ticker "OEX" cross the bottom of your CNBC screen, that's the one. Cboe Global Markets (CBOE) is now one of the best financial services businesses in the world and this week it made the Best Stocks in the Market list. Ever since the next generation of retail traders came along during the pandemic, it's been a bull run for options trading. In its July 3, 2025 report, Cboe said that June 2025 trading volume hit a new all-time record. They reported the highest ever quarterly average daily volume for S & P 500 options at 3.7 million contracts, and zero‑day-to‑expiry (0DTE) options at 2.1 million contracts. Zero days to expiration trading — which we refer to as 0DTE — continues to boom. Did you know that over 60% of S & P 500 option trades are 0DTE? It's wild given how new this type of contract is. Retail traders are estimated to be responsible for over half of this activity. Sean's going to give you the set-up on Cboe stock, which has been moving in a tightly wound, neat little uptrend all summer long. I'll be back at the end with a risk management comment. Best Stock Spotlight: Cboe Global Markets Inc (CBOE) On the list since: 7/22/2025 Sean — Cboe Global Markets (CBOE) made it onto the list this week. When I pulled up the chart, I knew I had to show Josh right away. The stock's lack of volatility is remarkable as you can see in the logarithmic chart since inception. The lack of volatility has given the stock a beta of 0.43 compared to the overall market's beta of 1.0, which means CBOE has about half the volatility of the S & P 500. For obvious reasons, this makes for an attractive risk-reward and many portfolio managers love building allocations with stocks like these. Despite its lack of volatility, CBOE has been anything but quiet. The stock has massively outperformed the S & P 500 since coming public 15 years ago, returning a cumulative 854% (inclusive of dividends) since inception vs. a 647% total return for the S & P 500, or 16% annualized vs 14% for the S & P 500. (data via YCharts). Ever since the trading boom of 2020, CBOE's fundamental outlook has been stellar. The increase in trading activity has led to an increase in the need for exchange-traded products as well as the underlying data tied to those products. S & P 500 options trading volume has been growing 8% a year over the last five years, while VIX options volume has been growing at a 15% annual clip. In addition to the increased popularity of its trading products, CBOE is also in the midst of adding more recurring, higher-quality subscription products so they can become less reliant on transaction volume over time. Cboe's non-transaction revenue business includes Data and Access Solutions (DnA), providing data, infrastructure, and global market access to its customers. The exchange's infrastructure and proprietary market data are getting leveraged into recurring revenue streams through subscription-based services. Unlike transaction-based revenues that fluctuate with market volatility, their DnA business provides steady, predictable income that complements the trading business. Said otherwise, the firm is leveraging higher-quality revenue. You can expect the market to award this improvement in "earnings quality" with a higher multiple. From 2020 through their last reported quarter, CBOE has grown revenues 5%, operating income 13%, and diluted EPS 14% on an annualized basis. CBOE is due to report next week on Friday, August 1st. Analysts expect Revenue of $575M up 12% year-over-year and EPS of $2.43, up 13% year-over-year. (Data via Quartr) Risk Management: Josh: If this were heaven, and not earth, this is what every stock chart would look like and we would just buy them all. You can see below how perfectly the buyers came in to save this name from a 200-day trend break during the market volatility in April. Investors in this name know that volatility is actually a good thing if you're the largest options exchange and clearing operation in the world. Earnings next week could produce a blip, which I would most likely ignore so long as the company does the number and guides up. For shorter-term traders, I'd use 220 as a pivot point. It retested that level in mid-June and bounced off it clean. If it gets below, there might be better set-ups elsewhere. Investors should obey the rising 200-day and check back every Friday close. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC" TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
Bloomberg
10 minutes ago
- Bloomberg
JPMorgan Traders Still See ‘Significant Step Higher' for Stocks
The S&P 500 Index 's record-setting spree may be stoking concerns about inflated share prices and a revival of meme-stock froth, but JPMorgan Chase & Co. 's trading desk isn't concerned. Rather, it expects the furious rally in US equities to keep going. 'While bullishness is not yet consensus, client conversations reveal that even those that skewed bearish are throwing in the towel,' the bank's head of global market intelligence Andrew Tyler said Thursday in a note ahead of the market open.
