US MARKET INTELLIGENCE | MORNING BRIEFING

Research evidence excerpt

US MARKET INTELLIGENCE | MORNING BRIEFING

A few things from yesterday that may interest you:

• GENERAL MARKET (Matt Reiner) – While the tape is ‘ugly,’ we aren’t seeing any panic or urgency

in our flows. Very little risk is being applied, but it’s clear that drawdowns today are quite meaningful

as momentum and crowding see a wave of risk reductions. Everyone has the same trades on….

Safety is being rewarded with Staples, Defensives, and low Vol rallying. I’m sure part of the move is

part of the derisk too, as the short end of positive momentum pairs come off – On the desk HF’s are

1.65x better for sale and they’re selling long and adding to shorts across Consumer, Tech and Real

Estate. Not just are HF’s lopsided for sale, they’re also highly active and currently outpacing LO

volumes by a whopping 71%. The LO demand here is super interesting, albeit thin… They’re

choosing to sell the defensive strength, and buy chips/hardware. While that’s a mildly comforting thing

to see with regards to the AI/momentum trade, we need to see a lot more of it. As a client said to me

this morning, “no one is going to touch anything today,” and that’s typically what consensus is when

confidence and risk tolerance is near the lows. The problem is, we’re in the midst of the most crowded

series of trades in history from a notional perspective, so when It comes to “where are we in the cycle”

you can throw the prediction model out the window.

• JPM ENERGY CONFERENCE – commentary from Sector Spec Brendan Henrici

o AI POWER – All solutions are needed. It is not an us vs. them dynamic. Whether that be on

BTM vs. FTM or existing capacity vs. New capacity or types of generation. Most questions

around competition were dismissed for remarks around rising tides – the equation is not one or