Technical Analysis

Sentiment on rising markets goes from hated to cherished

Fund managers see rising markets as most-crowded commerce

Probably the most-crowded commerce is in rising markets, in keeping with the fund supervisor survey from  Financial institution of America Merrill Lynch. It is the primary time in survey historical past that EM tops the listing and marks an entire reversal from short-EM because the third most-crowded commerce final month.

The push into rising markets is all about Chinese language stimulus, the central financial institution reversal and hopes for a US- China commerce deal. Since late in December all these themes have turned constructive and cash has rushed in.

The second-most crowded commerce is lengthy the US greenback. It has been #1 since December. The third-most crowded commerce is lengthy FAANG+BAT (Fb, Amazon, Apple, Netflix, Google + Baidu, Alibaba, Tencent) which was #1 from Feb -Nov 2018.

General, the survey did not level to long-EM as notably stretched and ‘crowded’ trades are likely to final months within the survey. There may be additionally the dichotomy of lengthy EM and lengthy USD being the 2 most-crowded trades when in actuality they have an inclination to maneuver in reverse instructions. That means the market is polarized on the end result of the commerce warfare.

Alongside these strains, many are additionally sitting out with the allocation to money on the highest since Jan 2009.

Fund managers see emerging markets as most-crowded trade


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