Hello and welcome back to our weekly positioning update.

Markets are as tricky as always, as everyone is trying to grasp how Powell will address all the new information coming out of the labor market recently, with NFP constantly being revised down, California job gains revised down massively while jobless claims look less scary. Despite parts of the labor market looking slightly weak, the signs we are getting from the real estate market is looking strong in contrast, which could make the Jackson Hole symposium a bit more interesting as Fed are starting to focus solely on their Employment / Growth mandate.

Positioning wise, the mood on markets have improved rapidly over the past 2 weeks with equity positioning approaching 2021 levels, and we are interestingly seeing the US supremacy story returning in markets. The move towards a broader allocation geographically was brief, and we are now returning to inflows into US equity funds that were last seen in 2021 – markets are jumping into the soft landing trades again!

Chart 1: Equity fund flows are back!