Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Strategist Who Nailed 2019 U.S. Stock Surge Warns on Positioning

Stock MarketsJan 11, 2020 05:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

(Bloomberg) -- U.S. stock positioning is near extreme levels as investors price in improving worldwide economic growth, according to Deutsche Bank AG (DE:DBKGn).

“Equity positioning, like the market itself, has run far ahead of current growth asinvestors price in a global growth rebound,” strategists Parag Thatte, Srineel Jalagani and Binky Chadha wrote in a note Friday. It “is now in the 96th percentile on our consolidated measure, with a wide variety of metrics very stretched.“

Systematic strategies have raised equity exposure to the top of their ranges -- to where the only time it was higher was in January 2018, prior to the large February sell-off, the strategists said. In addition, discretionary investors are now “clearly overweight” at the highest levels since October 2018, and equity futures long positioning for asset managers and leveraged funds combined is near record highs, they said.

The S&P 500 is up 1.1% already year-to-date and closed at a fresh record on Thursday, shrugging off geopolitical concerns as U.S.-Iran tensions soared. That comes after the benchmark soared 29% in 2019, its best performance since 2013, as central bank policy generally supported markets and the global economy appeared to be coming out of a soft patch.

Chadha is relatively bearish among strategists tracked by Bloomberg, expecting the S&P 500 to end 2020 at 3,250 versus Friday’s close at 3,265. That’s notable in two respects: One, because it’s a turnaround from 2019, when his prediction was the most bullish on the Street; and two, because he was the most accurate last year, as the gauge closed out the year at 3,231.

Read: Wall Street’s Top S&P 500 Bull Tamps Down Optimism for 2020

Other extended indicators mentioned by Deutsche Bank include:

  • Longs in emerging-market futures have risen to record highs
  • Call/put volume ratios are at the top of their historical range
  • Short interest in single stocks is near record lows
  • Short interest in exchange-traded funds has fallen to a new low
In addition, equity flows have turned up “strongly” over the last three months with almost $50 billion in the period, after outflows of about $300 billion in the prior 10 months, they said.

Strategist Who Nailed 2019 U.S. Stock Surge Warns on Positioning
 

Related Articles

Carlyle CEO says firm is committed to China
Carlyle CEO says firm is committed to China By Reuters - Sep 22, 2021

By Chibuike Oguh NEW YORK (Reuters) - Carlyle Group (NASDAQ:CG) Inc Chief Executive Kewsong Lee said on Wednesday that the U.S. private equity firm will remain a long-term...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
John Nichols
John Nichols Jan 11, 2020 12:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Beware. I sense the fluttering of wings Black. Listen...
Chris Sundo
Chris Sundo Jan 11, 2020 10:22AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Basic physics plays out in the stockmarket too via psychological phenomena of greed and fear plus being helped by algos, not surprisingly. ---
Chris Sundo
Chris Sundo Jan 11, 2020 10:22AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The algos turbo-charge the extremes.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email