TME Weekend: There’s room to add more to exposure

De-grossing done

The re-grossing we saw in the first 3 weeks of January took a breather in the past 2 weeks, which suggests there’s room to add more to exposures.

Source: JPM PI

Retail re-engagement

Retail re-engagement far from completed.

Source: JPM QDS

Sentiment struggles to reach 1 sigma stretched

The Goldman "Sentiment Indicator" measures stock positioning across retail, institutional, and foreign investors versus the past 12 months. Readings below -1.0 or above +1.0 indicate extreme positions that are significant in predicting future returns.

Source: Goldman

Non-extreme

BofA "Bull & Bear" indicator is neutral.

Source: Flow Show

Healthy

S&P500 RSI moves back down after a healthy consolidation. Sentiment not extreme.

Source: Macrobond

The V

Looking at it this way the market action over the past 2 years makes a lot of sense. And you would continue to be bullish for the rest of the year.

Source: UBS

2024 EPS tracking better

Path of 2024 bottom-up S&P 500 consensus EPS. Tracking better than normal.

Source: UBS

Cycle duration

Duration of recovery to prior cycle's peak (in month).

Source: Morgan Stanley

And this time central banks will allow it to run

Tactical upswing underway, sooner than most had expected. Easing liquidity points to tactical upswing and this time central banks will allow it to run.

Source: Macrobond

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