Premium"Cleansing": McElligott Says The Pod Purge Will Pass As Mag7 Call Whales Return Hours Before The Fed
Roughly 100 of them are out of a job, by headhunters' count, after the AI "growth scare," the OAT carry blowup and a cross-asset momentum unwind tore through the multi-manager world in October. And yet, a few hours before Kevin Warsh (almost certainly) explains why he isn't hiking today, and a few more before Alphabet and Microsoft report, the mood on Wall Street has flipped from panic to something like relief: the S&P is 1% from a record, Nasdaq vol has been crushed, and someone just spent ~$1.6 billion in delta on Mag7 calls.
Which brings us to Nomura's cross-asset guru Charlie McElligott, whose latest note, titled simply "CLEANSING" (available to pro subs), lands just hours before the FOMC and describes "a general 'sigh of relief' following [a] massive couple of days for the collective psyche across risk-markets and the macro phenomenon which is the 'AI-trade.'"