YWR Killer Charts

Disclosure: These are personal views and market commentary. These are not investment recommendations. For investment guidance seek professional help.

‘Contrarian’ Trades

80% of investors surveyed (500) by Bloomberg think we are going into a recession next year.

While 80% of investors expect a recession Goldman is predicting above consensus global growth (2.6%) for 2024 (The Hard Part is Over), ie, not a recession.

This is a highly important discrepancy!

According to the survey the best ‘contrarian’ trade for the 2024 recession is to buy high yield debt.

Buying high yield into a recession….I guess the thinking is the Fed cuts aggressively, so the drop in rates offsets any spread widening. Basically, implies a recession with no real fear.

The best ‘contrarian’ equity trade is to short tech.

For me this is another confirmation of my suspicion that long tech is the real contrarian trade.

Positioning

CTA’s are still very short bonds.

Source: Goldman Sachs

Equity positioning is neutral

Source: Deutsche Bank

Tech positioning also neutral. Investors used to be consistently overweight tech (2010-2013). Now it is more sporadic.

7 Charts on the global fund industry

1. Index funds still taking share from active management. Maybe more ‘actively managed ETF’s’ will reverse the trend.