Emirates Royal Group Bets on U.S. Stocks

2023-05-10 14:14:43 US Eastern Time

S&P 500 Index

It was followed by a paring of intraday gains on Wednesday

Bloomberg reports

Royal Group built up a multibillion-dollar short position in U.S. stocks.

What is Royal Group investing in?

The investment firm, based in Abu Dhabi, is controlled by Sheikh Tahnoon bin Zayed Al Nahyan, the national security adviser of the United Arab Emirates. The specific stocks or sectors it’s betting on remain unknown, though.

Royal Group dropped shares as recession fears became more prominent at the start of the year. Since then, it has been allocating more money to short-term U.S. Treasuries.

The group has been expanding its presence in

commodity

and

cryptocurrency

This was also confirmed by anonymous sources.

Royal Group declined to comment on the report today.

Factors that could weigh on U.S. stocks

The people familiar with the matter also said that once valuations improve and the central bank signals that it is ready to cut interest rates, Royal Group may become long U.S. stocks again.

But at the same time, it bets on

recent bank failure

That fueled recession fears and weighed on overall market sentiment. It’s also worth noting that a potential recovery in oil prices could be another headwind for the S&P 500.

However, as Invezz reports, inflation in the U.S. is currently at an annualized rate of 4.9%

here

.

Last week, Citi also warned that the benchmark index could fall to the 3,700 level, which is up about 8.0% for the year at the time of writing, despite the challenges.

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