MarketsMuse.com update courtesy of extract from a.m. edition of “Sight Beyond Sight”, one of the most widely-followed industry newsletters courtesy of global macro strategy ‘think tank’ Rareview Macro LLC.
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L/S Hedge Funds (Dumb Money) vs. Long Only Funds & Retail (Smart Money)
Model Portfolio Update – February 20, 2015 COB: -0.76% WTD, -0.32% MTD, -1.19% YTD
We return from our vacation re-energized and looking to provoke some strong emotions among the professional investment community.
If you are a long/short equity hedge fund this edition is going to bother you a lot. Why? Because you are NOT long European risk assets.
If you are a long-only equity manager this edition is going to make you even more confident. Why? Because you are long European risk assets. Continue reading →
Below excerpt is closing conclusion courtesy of Oct 28 edition of Rareview Macro LLC publication “Sight Beyond Sight”
The Federal Reserve (FED) will make its policy announcement tomorrow. The Bank of Japan (BoJ) will make its statement at the end of this week. The European Central Bank (ECB) meets next week. All three of them will be dovish at the end of the day.
Additionally, Jean Claude Juncker begins his presidency of the European Commission next week and that should embolden the call for fiscal help, which is required even more now that both Italy and France have changed their budget plans (see details below in Top Overnight Observations). There is no question that professionals we speak to are warming up to the idea of a larger fiscal announcement and this is tempering their bearish view on Europe to a degree.
Finally, with a positive US employment report, expectations of a Republican win in the US Mid-term Elections, and the positive seasonality associated with the start of a new month, it can be easily argued that the theme for the next two-weeks is global policy support.
The worst part of it is that everyone who was forced to reduce risk in October, and then missed the move back up, knows this is the market’s support structure regardless of the fact that QE finally ended yesterday.
This is not us being overly constructive on US equities or risk assets. After six weeks of one-way negative news flow and the sentiment shifting to extreme levels, there are now three weeks of events that should be supportive for risk. This is just the start of week number two in that period.
And that, combined with the lagging performance in the professional community, is enough to walk sentiment back even further, especially when countries like China and Sweden move out of nowhere to support the market on the upside.
MarketsMuse Editor: For the reader who requires further context re: above, the preface to above-noted thesis is… Continue reading →