Oraclum's predictions

Share this post

April performance and getting ready for FOMC

oraclum.substack.com

Discover more from Oraclum's predictions

An insight into how a hedge fund owner navigates markets, designs investment strategies, and performs monthly positioning with respect to current macro conditions.
Over 3,000 subscribers
Continue reading
Sign in

April performance and getting ready for FOMC

April overall had solid performance with small gains

Vuk Vukovic
May 2, 2023
Share this post

April performance and getting ready for FOMC

oraclum.substack.com
Share

Quick summary:

  • New survey is up & running - click here.

  • We finished April with 3 out of 3 positive weeks in terms of portfolio performance

  • Gains were small, but given the same sideways trading environment in April, not to mention that March performance, even that was a big move forward

  • This week is FOMC week. Another 25bps hike s likely.


The 2023 Q2 competition is open for its fourth week.

The survey is here:

Predict the markets!

More changes on our leaderboard, with new names coming up and an anonymous user being on top for the second week in a row. Kudos to them!

For all those new to the whole thing, watch this quick video guiding you through the survey, showing you all its features, and briefly explaining how the competition works:

Watch more on our YouTube channel. Thanks for participating, and keep having fun!


Performance in April 2023

April was another month of sideways, kangaroo trading. A bit less volatile than March and February, but equally unpredictable. And then last week, just as Tuesday and Wednesday were starting to signal a trend down with strong moves down, the reversal on Thursday and Friday made sure the SPX finished April on a high. It was a positive reaction to Big Tech earnings (more on that later this week), as the markets are once again preparing for the FOMC decision coming up tomorrow.

S&P500 during April 2023

How did we do in April?

Our performance has certainly improved. Overall we delivered a 3% gain to our investors last month and had all three weeks of trading ending positive (we didn’t do the survey in the first week of April). This was a direct consequence of our change in trading strategy since the March slump. These are still not our usual returns, but a steady pace will get us there soon.

Most importantly, in April we are again back to beating our benchmarks, as we’ve gotten used to over the past years.

FOMC: what to expect?

Actually, not much has changed compared to the situation we had back in March, despite the banking panic subsiding in the meantime. Even this week’s event of JPM buying the failed First Republic Bank didn’t add to the panic, quite the contrary actually. FOMC should, therefore, be a bit more in line with expectations this time. The markets are pricing in a 25bps hike, with over 90% probability.

Source: CEM FedWatch Tool

This should reduce the uncertainty as compared to last time, when a week before FOMC, the markets were still pricing in a 50bps rise, and many were expecting 0bps due to the banking panic. Things are much clearer now, so we should get only a single hike.

Now, is this bullish or bearish? On one hand, bulls will be expecting a 25bps followed by a pause for a while, which would act as a strong catalyst for a short-term rally.

The bears, on the other hand, have been pricing this in last week, before the Thursday and Friday earnings driven pullback. Not sure if there is any more of the sell-off left then.

Also keep in mind that this week we still have a lot of earnings left to go. AAPL is the biggest company left to report earnings (among others, Berkshire, AMD, Qualcomm, Pfizer, Pepsi, Starbucks, American Express, etc.), and judging by the performance of the other Big Tech firms, it should be another earnings beat that could add to the short-term rally.

Or maybe not. As always, you tell us :)

…join the $20,000 competition!

Join our survey competition to get an opportunity to participate in our quarterly ($5000) and annual (3% of our profits) prize distributions:

Survey

NOTE: This is only a hypothetical example with restrictive assumptions. The final reward distribution may indeed be different, as it depends on the total AUM of the fund and the annual performance achieved.

DISCLAIMER: Neither the survey nor any of the contents of this website can act as investment advice of any kind. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum Capital, LLC (Henceforth ORCA) is a management company responsible for running the ORCA BASON Fund, LP, and for organizing a survey competition each week, where it invites the subscribers to its newsletter (this website) to participate in an ongoing prediction competition. The information presented on this website and through the survey competition should under no circumstances be used to solicit any investment advice, nor is it allowed to be of commercial use to any of its readers. The survey and this website contain no information that a user may use as financial or investment advice. All rights reserved. Oraclum Capital LLC.

And, as always, don’t forget to subscribe to the newsletter!

Share this post

April performance and getting ready for FOMC

oraclum.substack.com
Share
Comments
Top
New
Community

No posts

Ready for more?

© 2023 Vuk Vukovic
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing