Hello everyone, and welcome back to our weekly positioning watch, now moved to Wednesdays.

Global macro has truly been a rollercoaster these past few weeks, and market narratives have constantly changed, making it somewhat difficult to navigate. Everyone has been juggling around between the growth party and recession stories, and markets have increasingly been leading into cyclical trades after the July NFP dust settled, believing that the signs we saw from the labor market was a one off.

Sentiment has quickly turned sour once again this week with both PMI figures yesterday signaling that the economy is not rebounding yet, and paired with the news we got from NVIDIA, the mood on equity markets have turned more or less upside down in an instant, making people buy defensives as consumer staples and health care like there was no tomorrow.

The consumer staples in particular has been flagged expensive in our PCA tool for some days now after the extensive rally seen in the sector over the past couple of weeks. Each and every time the growth scare comes back, markets seek shelter in McDonalds, Coca Cola and what not, despite the fact that there are no real places to hide in equity space if things truly sour.

The short consumer staples trade is also starting to look increasingly interesting from a positioning perspective, with our high frequent positioning indicator starting to show a certain crowdedness now, approaching levels not seen since before the pandemic (chart 1.b). Utilities / Health Care is also up there, while positioning in Tech has been more or less constant for the last month.

Chart 1.a: Macro/CTA positioning in equity sectors