Education Series: Single-Stock ETPs

Fund Managers: Bearish on Tech, Grim Holiday Sales

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Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at

In articles presented over the past several months, Bank of America’s monthly Fund Manager Survey has turned out to be prescient and instrumental in understanding the mechanics of market behaviour. In this month’s survey, a majority of respondents indicate that they expect inflation to go down over the course of the next year but they don’t expect lower short-term rates.

Of course, for lower inflation to become prevalent, one means is a recession. Survey respondents show the highest conviction since the COVID-derived highs in April 2020 that a recession is likely with convictions on the possibility of companies improving their balance sheets showing a slight dip.

Therefore, the consensus view among the survey respondents is that there will be “stagflation”: below-trend growth tied with above-trend inflation. 

Cash levels, i.e. the percentage of Assets Under Management held ready to be disposed off for loss reduction remains above 6% but tech stocks. The tech sector – the largest beneficiary of breakneck price growth in an era awash with money – were reported as being the least favourite among the survey respondents, who indicate that November has tech being the most underweight of choice since 2006. 

In a report released by Morgan Stanley in October, surveys analyzing shoppers’ tendencies indicated that most shoppers won’t be buying during the holiday season if prices were to increase. 

However, over 65% of the respondents indicated a willingness to buy if there were discounts over 20%.

As a result, the U.S. National Retail Federation expected a modest rise of 6-8% in sales which, when accounting for inflation, would have meant lower sales by volume. 

While traffic to malls may have been thinner than expected according to Reuters, web traffic remained robust. According to Adobe Analytics, shoppers in the U.S. spent a record $9.12 billion on Black Friday sales online.

However, the analytics indicated that it was steep discounts that drove sales to a year-on-year (YoY) gain. Mostly, electronic goods and toys were scooped up by shoppers after heavy discounts were applied.

This explains why FMS survey respondents were so wary about companies being able to improve their balance sheets: with discounts come lower profit margins. 

Mastercard’s SpendingPulse forecasted a 15% jump in sales on Black Friday overall, led by an 18% rise for in-store retail sales. Net sales were below these estimates at 12% and 14% respectively. Overall, crowds in the malls have been thinner and the driving force of sales have been discounts. A large portion of sales in this holiday season is estimated to be for the purposes of inventory reduction as retail stores and e-commerce companies improve their balance sheets: both Amazon and Shopify have laid off staff in the past couple of months. News reports indicate that Amazon intends to cut a further 10,000 jobs with recent “workplace optimisation” programmes in their India operations attracting the ire of the government for improper termination, i.e. without cause or adequate compensation. Legal notices have been sent; if found guilty, the consequences can be severe. 

This highlights the weakness in the consumer discretionary sector as evident in the Fund Manager Survey. Between the standard defensive sectors – healthcare and consumer – respondents indicated that they were overweight in favour of “healthcare” over “consumer”.

For 18 months now, respondents have been overwhelmingly overweight in the energy sector. 

This is evident in net positioning as well: “cash”, i.e. a readiness to divest, and healthcare are on top while consumer discretionary and tech are being considered with a heavily bearish outlook.

Overall, the Purchasing Managers’ Index – a key factor in the determination of economic productivity – has a net forward outlook trending downwards with rising wealth levels in Emerging Markets giving their PMI a slight push upwards.

All in all, it sounds like a sound strategy to consider leveraging the bearish outlook on tech and the broad market. 

Exchange-Traded Products (ETPs) offer substantial potential to gain magnified exposure with potential losses limited to only the invested amount and no further. Learn more about Exchange Traded Products providing exposure on either the upside or the downside to the S&P 500, the upside or the downside to the tech-heavy Nasdaq-100 as well as the upside or the downside to Amazon stock.

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

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Sandeep Rao


Sandeep joined Leverage Shares in September 2020. He leads research on existing and new product lines, asset classes, and strategies, with special emphasis on analysis of recent events and developments.

Sandeep has longstanding experience with financial markets. Starting with a Chicago-based hedge fund as a financial engineer, his career has spanned a variety of domains and organizations over a course of 8 years – from Barclays Capital’s Prime Services Division to (most recently) Nasdaq’s Index Research Team.

Sandeep holds an M.S. in Finance as well as an MBA from Illinois Institute of Technology Chicago.

Violeta Todorova

Senior Research

Violeta joined Leverage Shares in September 2022. She is responsible for conducting technical analysis, macro and equity research, providing valuable insights to help shape investment strategies for clients.

Prior to joining LS, Violeta worked at several high-profile investment firms in Australia, such as Tollhurst and Morgans Financial where she spent the past 12 years of her career.

Violeta is a certified market technician from the Australian Technical Analysts Association and holds a Post Graduate Diploma of Applied Finance and Investment from Kaplan Professional (FINSIA), Australia, where she was a lecturer for a number of years.

Julian Manoilov

Senior Analyst

Julian joined Leverage Shares in 2018 as part of the company’s premier expansion in Eastern Europe. He is responsible for web content and raising brand awareness.

Julian has been academically involved with economics, psychology, sociology, European politics & linguistics. He has experience in business development and marketing through business ventures of his own.

For Julian, Leverage Shares is an innovator in the field of finance & fintech, and he always looks forward with excitement to share the next big news with investors in the UK & Europe.

Oktay Kavrak


Oktay joined Leverage Shares in late 2019. He is responsible for driving business growth by maintaining key relationships and developing sales activity across English-speaking markets.

He joined LS from UniCredit, where he was a corporate relationship manager for multinationals. His previous experience is in corporate finance and fund administration at firms like IBM Bulgaria and DeGiro / FundShare.

Oktay holds a BA in Finance & Accounting and a post-graduate certificate in Entrepreneurship from Babson College. He is also a CFA charterholder.

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