TME Weekend: House-to-house

All quiet on the positioning front

Pretty similar backdrop to last week:

1. JPM: Overall positioning levels were fairly unchanged with the TPM Level at -0.3z (=fairly low, albeit not capitulatory). 

2. GS: Overall Prime book was small net bought on the week at the tune of 0.1 standard deviations (=nothing)

3. MS: Bill Meany’s PB Strategic Content team highlights that this week’s activity was much of the same. Net and gross leverage increased a mere +1% and +2% respectively (=nothing)

Finally

After close to 5 months in positive territory we finally got a negative print for the GS Sentiment & Positioning indicator. Far from 1 sigma level that actually means contrarian buy though.

Source: Goldman

Safety bid

Treasuries and cash saw strong inflows this week.

Source: Barclays

The Bid

Buyback authorizations are high but down 18% year/year.

Source: GS buyback desk

Meet the boss

US real yields dictate the day to day moves in equity markets.

Source: Barclays

Testing critical levels again

US HY CDS and moving average.

Source: Macrobond

House-to-house, block-to-block, urban warfare

That is the only way to knock out Hamas and it will have macro effects. Ambrose Evans-Pritchard: "The grand bargain between the US, Israel and Saudi Arabia is already a dead letter. This has large implications for oil at a time when the crude market is already in deficit and prices are at the upper band of their historical range"

Source: Telegraph / Bloomberg

CPI smells like that 21 spirit

"Although M/M CPI prints over the past 12mo had plenty of encouraging aspects, the last few have better resembled early ’21, when inflationary pressures really started to accelerate. Clearly, the intermediate path isn’t a sustained trajectory of lower M/M prints, and that could be an issue for the headline Y/Y prints (and equities). " 

Source: Jefferies

Lastly, four random observations

1. Europe’s seven biggest luxury businesses lost nearly a quarter of a trillion dollars in value since April.

2. Luxury (used) watches in a bear market. Since March 2022, the WatchCharts Overall Market Index has fallen more than 35%. 

3. Small Cap Stocks are now underperforming the S&P 500 by the largest margin in 22 years.

4. No compliance. In the U.S., 20-30% of prescriptions are never even filled and around 50% of people do not take medicine as prescribed. Will Ozempic have better traction...?

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