Hatzius: “On a year-on-year basis, our forecast for US growth shows -11% in Q2, -8% in Q3, and -5% in Q4, which clearly qualifies as U-shaped. On a quarter-on-quarter annualized basis, however, this same forecast shows -34% in Q2, +19% in Q3, and +12% in Q4, which looks rather V-shaped. Thus, our forecast is one in which the economy recovers only…[Read more]

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]