Shorts In Hibernation

The evaporated short

The SPX notional short is at its most subdued point since 2014...

Source: UBS

"Pro" longs

Funding spreads jumped big over the past week and are now at the highest levels since January 2018. Goldman's Marshall: "...we see this as an indicator that professional investors are comfortable with their exposure. For the most part, this indicator is a leading or coincident indicator for equities."

Source: GS

Fairly large reversal in nets

Equity L/S leverage: gross and net tracking lower recently with a fairly large reversal in nets YTD.

Source: JPM PI

Still not at euphoria levels

BofA's sell side indicator, SSI, nailed the lows. April saw the biggest increase in a while, but we are far from euphoria. BofA writes: "April’s increase moved the SSI closer to a contrarian “Sell” signal than “Buy”. But its level still indicates healthy price returns (+13% over next 12m), and when the SSI was here or lower, the S&P 500 was up 94% of the time over the next 12 mths. 81% overall."

Source: BofA

Goldilocks needs some cryo-therapy

CITI is asking if the global economy is overheating.

"Risk assets are getting more nervous about the cyclical backdrop proving inflationary again. Good news in economic data = bad news for equity markets, with the correlations between economic surprises and equities now having turned negative. Current negative stock-yield correlations show a similar story. This implies the market is increasingly worried on the inflationary outlook, as both bonds and equities sell off in tandem. Our bias so far has been towards positioning for a US soft landing and global goldilocks, given a pick-up in RoW growth. Latest price action warrants extra caution with respect to our current positions." (CITI)

Mind the margin

Callahan asking himself: "...“who” is funding the ~75- 80% GM that Nvidia is seeing on the expected $150-200bn of revenues over the next few years".

Stuck BTC

The 60k/72k range stays intact. Note the 100 day coming in around the 66k area.

Source: Refinitiv

Boring BTC

Bitcoin volatility continues to print new recent lows. The DVOL index is down from just sub 80 to 52 since April.

Source: Velodata

Hated puts

Put call ratio has once again "collapsed".

Source: Tradingview

Blackout

It has been the best of times for buybacks. They continue to work hard with the window fully open (~$5.5B worth of daily demand). We have seen increased daily activity levels (2.5x more ADTV vs. 2023 YTD). However, start of blackout is June 14th (gradually).

Source: GS PT desk

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