Asks about client conversations and positioning over last six weeks.
Host
Max Kettner
Positioning has become extremely light, as light as during last year's banking saga, allowing for relief rallies.
Tracks ~25 indicators across systematic and discretionary positioning.
Asks what constitutes a safe haven.
Host
Max Kettner
US dollar reigns supreme as the only safe haven.
Demonstrated during March liquidation where gold, Treasuries, equity, credit, EM all sold off except USD.
Asks about market correlations.
Host
Max Kettner
Correlations are unfavorably and uncomfortably positive. Stagflation is the poisonous pill.
In stagflation, nothing hides except USD cash. Everything else sells off amid higher rates and volatility.
Asks about US vs. rest of world preference.
Host
Max Kettner
Tactically prefers rest of world, specifically Europe and Asia (Japan, Korea).
These stories (Japan fiscal, Korea earnings growth) have been forgotten amid recent volatility. Korea has 170% 12-m forward earnings growth and P/E below 9.
Max Kettner
Shifted to maximum bullish on equities about 3.5 weeks ago.
Cannot be more bullish; no dry powder to 'buy the dip'.
Max Kettner
In Europe, likes banks and industrials. ECB pricing reversal steepens curve, helping banks.
Infrastructure stimulus, capital goods, defense spending stories haven't gone away but were forgotten recently.