Citadel Securities said the forces that helped drive U.S. stocks to record highs this year are still intact even as speculative trading by retail investors has cooled, according to a report carried by Jin10 and cited by ChainCatcher. Scott Rubner, Citadel Securities’ head of equity and equity derivatives strategy, said the market is shifting away from a flow-driven setup toward one shaped more by earnings, corporate demand and the broader macroeconomic backdrop. He said retail investors’ pullback has pushed assets in leveraged exchange-traded funds down 28% to $154 billion. Lower financing costs for stock positions also suggest pressure on Wall Street trading desks has eased. Rubner added that strong recent earnings have been supportive for U.S. equities, while demand from corporate share buybacks is expected to accelerate. The comments point to a market structure that, in Citadel Securities’ view, is relying less on retail-driven speculative activity and more on fundamental and institutional drivers.
Citadel Securities said the forces behind this year’s record highs in U.S. stocks remain "firmly in place" even after speculative trading by retail investors cooled, according to Jin10 in a report cited by ChainCatcher.
Scott Rubner, the firm’s head of equity and equity derivatives strategy, said the market is moving away from an environment driven by flows and toward one determined by earnings, corporate demand and the macroeconomic backdrop.
Rubner said the retail pullback has reduced assets in leveraged exchange-traded funds by 28% to $154 billion. He also said lower financing costs for equity positions indicate that pressure facing Wall Street trading desks has eased.
Strong recent earnings have supported U.S. stocks, while demand from corporate buybacks is expected to accelerate, he said.
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