Discretionary Investors Fade Half Of Melt-Up Positioning Increase

For much of 2023, re-leveraging and re-risking was the purview of systematic investor cohorts mechanically allocating to equities in a trending market where volatility was moving lower. What was missing, until late May anyway, was buy-in (figurative and literal) from discretionary investors. The turning point was Nvidia's epic guide and the resolution of the debt ceiling standoff in D.C. As the YTD rally morphed into a summer melt-up, fundamental investors begrudgingly moved off the sidelines.