Speculators Are Positioning For A Fiscally Dominant World
In 2026, the global financial landscape is shifting from central bank independence to Fiscal Dominance, where political spending needs now dictate interest rate policy. To hedge against this, "smart money" is fleeing the US Dollar and Treasury bonds fearing structural inflation and pivoting into hard assets like gold and copper. This trend is confirmed by current Commitment of Traders (COT) data, showing record institutional positioning in precious metals as a final shield against currency debasement. Source: zerohedge, Simon White, Bloomberg macro strategist
Largest stock market in the world at the time
not always U-S-A... Source: Meb Faber
BofA Bull & Bear Indicator (B&B)
The revamped BofA Bull & Bear Indicator is now at 9.0, exceeding the 8.9 on Oct 1st which was “an extreme bullish level last seen in Feb’18 & Feb’20,” and remaining above the “contrarian sell signal” level. “[Outflows from tech stocks & EM debt [were] offset by very strong global equity breadth (98% of country indices above 200dma), super-low BofA Global FMS cash positions (record low 3.3%), hedge funds adding to S&P 500 longs via futures; new revamped B&B Indicator 8.5 on Dec 17th, 8.8 on Dec 24th, 9.0 on Dec 31st [and Jan 7th]” Source: BofA through Neil Sethi
Is the volatility index VIX set to spike?
Asset managers have aggressively increased their VIX futures shorts to the highest level since July 2024. In other words, funds are betting heavily on continued low stock market volatility. Such extreme short VIX positioning often leaves markets vulnerable to sharp volatility spikes if sentiment turns. A similar setup occurred in July-August 2024, when a sudden shift in risk appetite drove a nearly -10% market drop. Are we heading for a pullback? Source. Global Markets Investors
Where are fund managers most bullish for 2026? 🤔
Based on Markets Recon's review of ~250 asset manager outlooks for 2026, the most frequently mentioned overweight call was... GOLD 🥇 What else do asset managers like for 2026 portfolios? 📈 In Equities, it's AI 🤖, EM 🌍, and Japan 🇯🇵 stocks getting the most love. 📄 In Bonds, its EM Debt 🌎 and Securitised Debt 🧩. And in Private Markets, Infrastructure 🌉 is the most admired. Source: Stephen White, CAIA from Markets Recon
Anthropic plans to raise $10 billion at a valuation of $350 billion.
Source: Brew markets
The founder of the world's largest hedge fund just dropped his roadmap for 2026.
We ran it through Sidekick to break down the key takeaways and where he’s positioning as markets shift. Here’s the breakdown: Source: TrendSpider @TrendSpider
CONTRARIAN ALTERT >>>
BofA’s Bull & Bear indicator has moved into Extreme Bullish territory, rising to 8.5 from 7.9 and triggering a contrarian sell signal for risk assets. Readings above 8.0 have often preceded pullbacks, with global equities declining a median 2.7% over the following 2 months, with a 63% hit rate. Source; HolgerZ, BofA
