Stock markets care much more about US Treasury auctions now than they used to
Chart from Citi’s Stuart Kaiser thus Lisa Abramowitz
Investor Repositioning on HY Revealed in Latest BoFA Credit Survey 🔄📈
The recent BofA Credit Investor Survey reveals significant shifts in market sentiment. For Investment Grade (IG) investors, net positioning dropped to -8% net underweight in November from a +8% net overweight in September. Conversely, High Yield (HY) witnessed an uptick, reaching +18% net overweight in November, the highest since Jan-2022. Notably, HY investors are more optimistic about spreads, with the net share expecting wider spreads dropping significantly for the 3 and 6-month horizons. Delving deeper into investor positioning, the HY landscape presents a nuanced picture. The primary repositioning in November focused on the #frontend (1-3y) and #higherquality of the HY. Many asset allocators are embracing a barbell strategy, blending exposure to the intermediate/long end of high-quality corporate bonds or Treasuries with a portion invested in the front end of the US HY, enhancing the average yield. The goal is to navigate economic uncertainties by benefiting from the safety of high-quality fixed income and compensating for potential defaults in the HY space. Could this strategic approach push the HY-IG Yield Ratio lower, considering it already reaches post-GFC lows? #CreditMarkets #Investing #FinanceInsights 📊💼 Source: BoFA
2023 has been the polar opposite of 2022:
-Worst performing areas of the equity market in 2022 (Nasdaq/Tech/Growth) have been the best performers in 2023. -Best performers from 2022 (Energy/Value/Equal Weight) have been the worst in 2023. Source: Charlie Bilello
Japanese investors are selling US corporate debt at a record pace 👀
Source: Bloomberg
Central bank liquidity and the Sp500 are experiencing a rather large divergence. Will it matter?
Source: Markets & Mayhem
Hedge Funds have increased their short stock positions for 14 consecutive weeks, the longest streak in history
Source: Win Smart, Goldman
As highlighted by Linas Beliūnas, Magazine cover pages can be good contrarian indicators...
Last week, Sam Bankman-Fried found guilty on all 7 charges, faces up to 115 years in prison while WeWork filed for bankruptcy marking one of the biggest start-up failures of all time.
Explained: India’s Gold Demand During Diwali - by Elements, Visual Capitalist
In India, gold’s significance goes far beyond investment and jewelry. The yellow metal is woven into India’s cultural history and is revered by a population of over 1.3 billion.
