Why George Soros Lost Money during Trump Rally



George Soros’s activity in 1Q17

According to the latest 13F filing report, billionaire George Soros’ short position in the S&P 500 Index (SPY) saw a loss in the first quarter. According to CNBC estimates, this loss might have totaled $1 billion.

Soros has made huge profits in recent years from strong investment decisions. In April 2016 at an Asia Society event in New York, the billionaire hedge fund manager predicted that China’s surging new credit is a warning sign for global investors.

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After Donald Trump’s win in the US (QQQ) (IWM) presidential election, George Soros became bearish on the US stock market (VFINX) (IVV). He was concerned about President Donald Trump’s proposed policy changes. According to Soros, Trump’s proposed trade policies could hamper global trade, which wouldn’t be good for markets.

Market performance in 1Q17

However, the market showed a different picture in the first quarter. The S&P 500 Index returned nearly 4.5% in 1Q17. Since the US election, the index has returned nearly 11.6% as of May 26, 2017. The improvement in various economic data such as manufacturing PMI, service PMI, consumer confidence, inflation, sales growth, and business climate index helped the S&P 500 Index to rise.

The optimistic view on the US economy and Donald Trump’s proposed policy changes have primarily driven investment sentiment. The first quarter earnings growth also showed a strong recovery. Morgan Stanley’s (MS) chief equity strategist, Mike Wilson, is optimistic on the bull market. He believes the S&P 500 could touch the 2,700 level in the next 12 months.

In the next part of this series, we’ll analyze George Soros’ position in the iShares Russell 2000 ETF.


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