By Sam Boughedda
Citi analysts said Tuesday that markets are bearish everywhere, not just banks, with the SVB Financial (NASDAQ:SIVB) news appearing to have amplified the bearish trend in flows.
"Markets across the board have been selling off sharply, and positioning is rapidly switching net bearish as we enter the week of the ECB, but also the week in which investors roll expiring futures positions," they said.
On U.S. equities, the analysts revealed that the S&P 500 had nearly $11 billion new shorts added in the past week and turned marginally net short, while NASDAQ positioning continued the "steady pace of becoming increasingly bearish."
"P&L is more extended on S&P than Nasdaq positions. Financials is the most crowded sector in the US, though SVB Financial and Signature themselves are relatively uncrowded," analysts stated.
They also noted that European bank futures positioning had been very extended bullish for all of 2023, and while there was a string of new short additions before the news on SVB Financial, they appear to have accelerated on Thursday and Friday.
In addition, Nikkei 225 flows have "bucked the bearish trend" and reached the largest net long position in over 3 years.