Better than 1999
Front running 1999
It looks like we are front running the 1999 trajectory. Do we see a mini correction during the summer like we saw back then, before the real craze starts?
Source: Refinitiv
Largest month of equity buying since 2010
May ranked as the largest month of buying of US equities since 2010. US L/S net leverage rose to 12 month highs as a result of the buying. Mega-Cap TMT drove the bulk of the buying in North America pushing net exposure to these names to decade highs. Traditional defensive continued to be bought with May being the 4th largest month of buying since 2018.
Source: Morgan Stanley
The crowd
No surprises here....Long Big Tech, the most crowded trade.
Source: BofA FMS
Show me exposure
Yes sir, we are all in on calls. IWM call open interest and volumes have exploded to the upside.
Source: Barclays
Source: GS
Leaders and valuation
The dot com and the Covid bounce were the "inflection" points when leaders breached the 7% level. How was valuation back then?
Source: Barclays
US 10 year - the break out?
Massive action to the upside in yields. The 10 year is currently trying to break above the negative trend line that has been in place since Q4 last year. Big dynamic formation...
Source: Refinitiv
Last time the 10 year closed here, NASDAQ was...
...some 23% lower. We are not suggesting this gap is to revert fully, but one thing is sure, back then nobody had tech longs, and now the same people love it.
Source: Refinitiv
Finally some hints of FOMO
Cash level dips to 5.1% from 5.6%. "Cash is still high-ish but no longer uber-high and no longer slam-dunk contrarian bullish."
Source: BofA
Got central bank straddles
EC, Fed and BoJ priced at 5 year lows if viewed via Eurostoxx 50 1 week straddles. Give away small premium...
Source: Barclays
The upside gamma profile
Dealers are in long gamma, but should this market rip even higher, they enter short gamma. They would turn into chasers of deltas in such a scenario. This kicks in 2-3% higher from yesterday's close.
Source: GS
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