U.S. markets rally as institutional investors enter

By Irene Aldridge (https://twitter.com/irenealdridge)

Post date: 2023-01-23 15:51:59 GMT

Institutional investors showed strong buying interest in the U.S. markets this morning, while the high-frequency traders' flows were mixed, as detected by the AbleMarkets Institutional Investor Activity (IIA) and Aggressive HFT (AHFT) indexes. Both institutions and HFTs are well-informed sophisticated investors, so why the discrepancy? Such difference in flows often reflects a different perspective for different time horizons. HFTs aim at short-term horizons: intraday or shorter, while the institutions target monthly, quarterly or even longer-term investment results. Hence, we may expect mixed market results in the intraday setting and positive results on the longer horizon.

HFTs may indeed be reacting to the coming Wednesday's news announcements on the U.S. oil inventories that are projected to decline further, potentially fueling oil prices and inflation. Oil inventories are an important indicator for the U.S. markets because they provide insight into the health of the oil industry. Because oil is a major component of global economic growth, changes in oil inventories can have a significant impact on the stock market. An increase or decrease in oil inventories can indicate changes in supply and demand, which can affect the prices of oil and other commodities. Thus, keeping track of oil inventories can help investors anticipate price movements and make informed investment decisions. Additionally, changes in oil inventories can also provide insight into the global economic outlook, as changes in demand can provide clues to future economic activity.

The institutional investors, however, appear to maintain a rosy outlook moving into the 2023. Understanding the difference between how institutional investors and high-frequency traders operate is crucial for making sound investment decisions and managing investment risks. While HFTs are focused on short-term results, institutions take a longer view of the markets. This discrepancy often leads to mixed market results in the short term but positive results over the long term. If you're looking to make informed investment choices, subscribe to AbleMarkets now and take advantage of our AI technology.

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