First trading day of April, equities now seeing inflows, there are good reasons why systematic funds want to be "long" April.
I said months ago and repeat again, Let’s never forget the Roaring 20’s happened after
Spanish Flu. Right now: Inflation expectations: highest since 2008.
The Fed is clear: “we need 0% rates through at least the end of 2023 & trillions more in bond buying to boost asset prices & increase inflation”.
Meanwhile the Nasdaq/Growth trend having out-performed almost all asset classes since 2008 plus is over in terms of mega -cap concentrations.
Why stock picking now really matters in Technology especially. See Semiconductors here case in point. AMAT US, huge alpha here, also simple Semis/SMH US etf.
This all at the same time as the DOW/ EuroStoxx/ Value/ Emerging are now out-performing
considerably. This trend has only just begun. Massive infrastructure spending STUFF= Tattoo’s not top-knots.
Loosers & Winners:
Pandemic Losers are crushing their Pandemic Wining peers as the world re-opens. That makes simple logical sense. How many Zoom calls and Peloton rides will people wish to take this Summer? Don’t get me started on the likes of Deliveroo or DoorDASH. Instead talk to me about off-shore drilling!
Finally; Yes, Rates are now normalising higher. Negative Rates are not sustainable. For the third successive Quarter anyone long Fixed Income has seen a negative total return on their Portfolio.
Asset allocators will not be placing the marginal investable Dollar to Fixed Income unless they have to for many years to come as an opinion.
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