"Some remarkable things [are] occurring, particularly within the US Equities space", Nomura's Charlie McElligott writes, in a Thursday note.
As documented extensively over the past two sessions (here and here), markets are undergoing a violent rotation from secular growth favorites to value, cyclicals and high beta. The shift comes amid rampant optimism around the US reopening story and giant fiscal stimulus strides in Europe and Japan.
The trade has propelled some down-trodden sectors to huge gains, both in absolute and relative terms. Outperformance from the laggards comes at the expense of the market's darlings, some of which are now imperiled by a new executive order from Donald Trump targeting the tech titans.
As McElligott writes, this represents "a tectonic 'de-grossing' of short books and overall dynamic hedges, acting to propel both indices and prior 'Value' laggards violently higher, while crowded 'secular growth' hiding-place longs acting as an ongoing source-of-funds for this nascent rebalancing".
Note his use of the term "nascent". Last weekend, I used that to set up a long piece called "The Only Debate That Matters", in which I noted that "nascent" and "burgeoni
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