Bearish. Ceteris Paribus, Of Course

Even if Treasury's cash rebuild ends up funded primarily through RRP transformation, the liquidity backdrop will be less forgiving going forward, and that should be expected to weigh on equities all else equal. Of course, all else is never equal. Not even close. Stocks are highly susceptible to fits of mania and bouts of despair. Ironically in that context, they can also be hostage to unemotional shifts in systematic flows dictated by momentum signals, portfolio vol and other mechanical trigger

Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today

View subscription options

Already have an account? log in

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

4 thoughts on “Bearish. Ceteris Paribus, Of Course

  1. The data in this post aligns with something I have been contemplating the last few weeks. The liquidity drain might not manifest itself in lower equity prices until late summer – fall, which would coincide nicely with the time of the year we typically associate with large corrections or actual crashes. I’m not deploying real cash here but continue to play the upside with options until doing so ceases to work.

  2. There are some headwinds for risk assets for sure. I would love to have a good handle on the right level for 10 yr ust bonds. But tge longer this environment lasts the less i know.

  3. I have a personal, proprietary model, fondly known as ‘mutatis mutandis’, which concludes that, ceteris paribus, the US stock market will rise, over time.
    🙂

NEWSROOM crewneck & prints