What a couple weeks! Confidence in the US banking system has been under immense stress, and some contagion crossed the Atlantic and struck Europe as well. Triggered by a casino in disguise, the troubles have for now been backstopped, but is further distress lurking beneath the surface?
In this somewhat unusual edition of the ‘Positioning Watch’ we’ll take a look at relevant and readily available data to assess whether we are leaning with or against the wind. Maybe this can provide further insight into the ambiguity which we have experienced in markets lately.
As the tides have turned on global liquidity (at least for now), we decided to look at equity risk premia in a historical context. Do you get adequate compensation for equity risk? Probably not.
When the TGA is built up due to T-bills issuance, the ON RRP usage drops, which net/net means that USD liquidity keeps printing at more benign levels than anticipated by many. This will continue throughout February and March
Everyone agrees that a recession will hit this year, but will the Chinese reopening wreak havoc with the very uniform positioning across assets? Our flagship editorial Steno Signals is out every Sunday at 14 CET / 08 ET
Right about everyone and their mother expects a new low in equities in Q1/Q2-2023 because of earnings disappointments. Here are two reasons to remain decently upbeat.
Lagarde starred in the role as the slightly more tanned Grinch as central banks decided to ruin Christmas. Structural liquidity doesn’t look too bad and 2023 is not necessarily the year of the bear.
The REAL world is back. China ponders reopening, while Meta struggles. The stuff that got us into this bubble, will likely not lead us out of this bubble. Buy Industrials vs. Tech.
