What JPMorgan And Nomura’s Charlie McElligott Are Saying About Stocks As August Kicks Off
If you harbor some “misgivings” about US equities, which have run more than 45% from
If you harbor some “misgivings” about US equities, which have run more than 45% from
Gathering storm clouds notwithstanding, market participants are obliged to ponder the somewhat surreal prospect that,
Earlier this week, in “Control“, I described the moribund action in US rates. If (when)
“Days like yesterday express the challenge for managers right now, as the ‘everything duration’ trade
“With the simple mathematical reality of realized volatilities over short-term (trailing) windows likely collapsing lower
“The entire professional investor universe is, in my mind, basically a momentum trader themselves”.
“Remember my generic thinking on these strategies: ‘Volatility is the exposure toggle.'”
“All’s well unless”…
“The ‘trade up into-, trade down out of-‘ the June serial options expiration phenomenon [is] finally kicking in”.
“…we might have triggered a ‘buyers are higher’ dynamic”.
“…a meaningfully larger drop-off”.
And yet, remember that all of this comes with an important sequencing caveat.
“So what was yesterday all about?”
Legacy long position in US rates and duration enters “a very dangerous space”.
“Many of these previously ‘left for dead’ equities have beta/convexity to upside in economic growth or inflation”.
“…a broader distribution of outcomes [and] a wider range thereafter”.
“This is obviously what the market is debating right now in real-time”.
“…we would need to see an unprecedented marriage where both monetary and fiscal policy align in a magnitude not previously experienced”.
Also, there’s vaccine euphoria in the air.
Prepare for a possible ‘unclenching’.
We’ve been here before.
“Cash crunch issuance realities.”
The summer fade, and a possible bounce thereafter.
Just when you thought it was safe…
These are modern markets. You must learn to speak the language.
“If you’ve learned anything post-crisis…”
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