Busy Buybacks, FOMO and Inverse Panic
Not your bull break out candle
SPY gapping up, but with a doji like candle. This is indecision at highs. Pay close attention....
Source: Refinitiv
That was quick
Apple at the most overbought levels since the summer of 2021.
Source: Refinitiv
Feeling stressed in Apple?
You are not alone. Mutual funds are running a big underweight in Apple and they just missed this massive move. GS: "The avg mutual fund holds AAPL as a 250bps underweight (almost 2x the next most Mag 7 underweight stock)".
Source: GS
Busy buybacks
GS sales: "Our buyback desk is currently running at 1.6x ytd daily avg notional executed. It was by far the busiest our trading desk has been since MSCI rebal (when asset managers used rebal to move in and out of some sizable positions)..."
Inflow mania
Rubner: "Global equity funds have seen $190.5 Billion inflows YTD. This is the second largest equity inflows on record (only 2021 saw more inflows). This is +$1.7B worth of equity inflows per day."
Source: GS
Inverse risk aversion
The higher we go, the more hated downside protection is, at least judging by how skew is priced. SDEX touching year low levels...
Source: Refinitiv
Fear of missing the upside
JPM's Matt Reiner sums it up: "my clients are trimming safety and adding to momentum longs. While there’s no panic, and very little risk being applied, clients are worried about missing upside not downside."
The case for peak NVDA
NVDA stock Y/Y% change tracks the growth rate of revenue & EBITDA revisions, and both look peaked.
Source: Stifel
Source: Stifel
Elections volatility has come down as well
Time to look forward...After the CPI/FOMC, clients will likely focus on the elections, which historically lead to risk reduction. In 2016, the SPX corrected almost 9% from early September to the end of October. Goldman's model predicts a 2.74% implied move for the upcoming election, with the first debate on June 27th.
Source: GS
Correlations crashing
Implied correlations continue crashing. The COR3M just printed another new all time low.
Source: Refinitiv
Schwarzman says...
1. I've only been in this movie numerous times… to the extent that people have a generalized feeling that real estate isn't so wonderful, it provides a amazing opportunities for us because we're the best capitalized real estate buyer in the world.
2. On AI, you people who don't want to change, you're going to be damaged from either a little bit to severely. And if we're adopters and we want to do this, we will be the winners and there's no choice. You cannot wait. You have to be in this in this game. And I truly believe that.
--- Stephen Schwarzman, Chairman, CEO & Co-Founder of Blackstone
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