babakrowshan.bsky.social
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BoA GFMS Apr 2025: 90% expect stagflation to be the condition of the global economy over the next 12 months with dwindling hope of the Fed coming to the rescue (34% expect 2 cuts in 2025, 25% expect 3 cuts, 16 with 4 or more):
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With 49% saying that "long gold" is most crowded trade - breaking "long Magnificent 7"'s 24 month streak
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BoA GFMS Apr 2025: net +34% saying gold is overvalued (similar level to mid-2011) but 42% expect it to be the best performing asset in 2025 with cash/bonds tied for 2nd place:
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BoA GFMS Apr 2025 show shifts in asset allocation to defensives: bonds, cash, utilities, healthcare, staples from tech, Japan, EM, UK, Commodities, Energy, Materials, Telecom, Disc, US, Banks, EU, Industrials
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BoA GFMS investor sentiment, an aggregate measure incorporating cash levels, equity allocation and growth expectations dropped to 5th worst level on record:
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BoA GFMS cash levels increased to 4.8% (+125bp since Feb'25), biggest 2 month increase since Apr 2020 - avg cash level before 1999 was 6.2%.
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Net % taking higher than normal risk decline to -46%, lowest level since May 2023:
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Net global equity allocation fell to -17%, lowest since July 2023 - since Feb'25 decline of 52% pts, largest 2 month decline since Apr 2020.
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Global growth expectations, however, are at a 30 year record low, with "hard landing" odds hitting a record 49% (up from 11% & breaching prev record 30%).
"Hard landing" odds were 5% when Trump took office, so a 10X move in view of global fund managers. "No landing" (+ growth) fell to 3% from 38%!
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While this is all 'soft' data, it isn't all that helpful to focus on intentions vs reported positioning (note delta during GFC).
BoA GFMS for April 2025 Net % overweight US equities at -36%, lowest since May 2023 (biggest 2 month decline on record from Feb'25 -53% pts):
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Ultimately it comes down to this one question, which will create a bifurcation in our path: will we have a recession?
Based on history, the path that equities take for either of the binary outcomes is dramatically distinct.
chart via 3Fourteen Research
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the staff of The Onion have my full, unreserved sympathies
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It isn't at all surprising to see global macro hedge funds being long gold (trend following, momentum, safe haven, relative strength, geopolitics, so many reasons!).
At the same time, given where positioning stands currently we can't ignore that it corresponds to previous plateaus (vs valleys).
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Here's another from Tosten Slok: liquidity drying up in 'off the run' bond market.
"Liquidity in on-the-run bonds has improved, but off-the-run paper has become virtually untradeable and effectively a buy-and-hold investment."
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Mark, do you have a link to the study? Thanks
In case you hadn't already seen this historical study from TS Lombard:
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And here we have Jon Stewart's half-baked realization after Trump is literally ignoring habeas corpus and a 9-0 Supreme Court decision.
Yes, Jon is an entertainer, but this is not remotely funny. Nor is hiss unctuous apology commensurate with the historical weight of this moment.
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Bob, how many such historical parallels are there? I mean, periods where consumer sentiment declines caused an economic downturn? how far back to we have to go to find one? TIA
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Today's stock market performance is not really that great, sure, breadth is impressive with 82% of NYSE and 70% of Nasdaq advancing. But what lead the charge? defensive sectors: Real Estate, Utilities, Staples.
US dollar didn't budge, gold at near ATH, etc. the 'bright spot' is rates coming down.
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We're going to hear from corporate America very soon about earnings guidance (or lack thereof) - earnings revisions are at their lowest since April 2020 when there was a similar fog due to COVID.
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Vlad Vexler's thoughts on Maher's submission to Trump
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Good points, similar thinking from bobeunlimited.bsky.social in case you missed his take.
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It is truly tragic that so many are being forced to re-learn lesson from history that should already be part of our collective consciousness (in order to avoid unnecessary suffering & go forward rather than backwards).
One of them is that tariffs and corruption go together like PB+J:
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Euro valuations may seem attractive compared to the US stock market but compared to themselves, they are a smidge higher than their historical median.
GS: "Non-US markets, while cheap relative to the US, are not
particularly inexpensive relative to their own history"
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Here we go again, one step forward, two steps back... Trump is now bellowing that the tariff exemptions on IC, chips, phones, etc aren't really exemptions...
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From Goldman Sachs: Valuation measures for Europe, UK, and US (Worldscope) using average percentile of NTM P/E, LTM P/E, LTM P/B and LTM P/D - US 84%, EU 46%, UK 39%
www.gspublishing.com/content/rese...
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Gap up and climbing... for now
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"We show consumer expectations indices from the Conference Board and the University of Michigan predict unemployment upticks in the USA up to 18 months in advance, both at national and at state level."
www.cambridge.org/core/journal...
Consumer sentiment charts below from Slok via Apollo Academy:
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TRIVARIATE: “growing number of investors are concerned that earnings could be down in 2025 vs. 2024, and that an S&P500 level of $4300-$4600 is likely the bottom.”
accommodative Fed ... might be perceived a result of a deteriorating economy that ... portends ... decline in ... corporate earnings
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You mean the debt levels? with the implication that the consumer can't borrow as they did to spend? I have the same notion but if there's one thing that is difficult to overestimate, it is the propensity of the US consumer for consumption at all or almost any cost.
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MAGA Maoism, Trumpism as a third-world movement
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MAGA Maoism: from 'negative' productivity jobs in government to 'high' productivity jobs sowing sneakers and mining ore
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Prof Blanchflower, have yet to read the whole paper, based on the abstract, if I understand the thesis correctly, what do you think is the explanation for the 31+ months since its publication without a recession (almost double the '18 months in advance' mentioned)? TIA
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If I recall, this was a report in late 2015 by Inker and Grantham titled ”Just How Bad Is Emerging, and How Good Is the U.S.?” and "Give Me Only Good News!". Sadly, it seems to have been removed and no longer available on GMO's site (!). Here's a copy hosted elsewhere:
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Telling that Trump didn't trumpet the exemptions retreat on social media as he loves to do usually.
Cramer strikes again!
After being a staunch defender of Apple stock, on Friday he weakened on his 'own, don't rent' thesis for AAPL