Marko Kolanovic: Investor positioning remains light. Hedge funds are positioned defensively with an equity beta in the ~10th %tile, and systematic investors’ exposure is near the bottom of its historical range. CTAs would be covering shorts / buying long if the S&P 500 reaches ~2900. Volatility-targeting funds will start adding equities as v…[Read more]

JPM: “In our client conversations, we continue to detect widespread skepticism and bearish sentiment among equity investors. As a result, the recovery in equity markets has been causing a lot of frustration among predominantly bearish investors”

Morgan Stanley Quant Team: MS QDS notes that while the market recovery and vol compression are impressive, they are not enough to force material buying from systematic strategies (Vol Target Funds and Trend Following CTAs). To generate meaningful demand from Trend Followers, the S&P 500 would have to rally closer to 2900 (50d moving average, and…[Read more]

The below tidbit from Sanford Bernstein head of strategy summarizes the massive consensus view right now. Two questions bears have to ask themselves:

1. can consensus be right?

2. if many of the bears out there anyhow are bullish on a 12m time frame – how close to switching sides are they…?

If the markets are made to make as many participants…[Read more]

Will Congress enact further fiscal measures? GS: Almost certainly…
“Phase 4 suggest that Congress might enact measures expanding the deficit by another $500bn (2.4% of GDP) or so in the remainder of 2020, on top of the recently enacted policies, with additional fiscal expansion of another $1 trillion or so cumulatively in 2021 and 2022”