Positioning Watch – Markets are blowing off the recession
Hello everyone – hope you’re enjoying the weekend! Today is both the day for the 1st stage of the Tour de France but also our weekly positioning watch, and what better combo than reading about markets and watching cycling at the same time? A lot of great Danes amongst the riders if you are missing someone to cheer for – we are at least doing so from Copenhagen this summer
The world of global macro and geopolitics has really been exposed to a lot of changes, market-moving events and surprises in the last week with Prigozhin’s march towards Moscow (which turned out to be a bit of a nothing-burger), Central Bank panel discussion and interest rate decisions in the Nordics.
The economy (especially in the US) is holding up far better than expected, and with inflation coming back down, that’s a perfect cocktail for an extended rally in equity markets. However one must remember that inflation is likely coming down due to waning demand, and weak economic data will therefore come with a lag. But for now, we’re riding the AI wave in our portfolio. You are currently not having a great time if you are not long equities as both US and Europe have been flying this year. Asia is on the other hand starting to lose momentum, and the long Japan consensus is starting to fade- though after an 30% YTD rally.
Chart 1: Equity returns across the globe
But getting to it: The weekly release of the CFTC report
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