A $900 Billion Rebalancing Flow?

A $900 Billion Rebalancing Flow?

As discussed here late last week, there's a strong argument to be made that beleaguered equities are in for a bit of respite headed into month- and quarter-end thanks to what should be a pretty epic rebalancing flow. This has, of course, been an absolutely egregious month for stocks, with SPX -23% (and -30% on the quarter). The disparity with bonds is quite something to behold. "Drilling down into this portfolio rebalancing” dynamic and looking at a simple performance-spread of SPX versus TY
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4 thoughts on “A $900 Billion Rebalancing Flow?

  1. Will be watching but…guardedly. Why would anyone buy stock in companies facing a depression? So they can average down two, three months from now? A fool’s errand.

  2. Most organisms are the most dangerous when in a state of desperation or when they are cornered………Sometimes they self destruct and sometimes they survive…If you are short this market it is a good thing to remember……..

  3. I think we’re seeing some effect already as the VIX is coming down from its peak despite no respite in the bad news from the medical and economic stories. It’s creating some temporary calm, but the calm will likely end soon.

    Initial claims Thursday morning will likely overwhelm.

  4. See chart 2008-2009. I posit we are somewhere in October 2008, post-Lehman. Market appeared to stabilize for a couple months then bottomed a good deal lower in March 2009.

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