Having been less sanguine for a few weeks, Goldman Sachs flow of funds guru, Scott Rubner, gves equity market bulls the "all clear" in his latest note suggesting that so-called 'April showers' (for Global Equities), will bring 'May flowers' (new post-Memorial Day ATHs?).
Six factors support his thesis:
I. There is again a new supply and demand equity technical mismatch and it is now a tailwind, heading into favorable seasonals for equities.
II. The largest buyer of equities is back in the market, US Corporates. And they are authorizing record amounts of stock.
III. We also have equity CTAs now firmly on the buyside, a green sweep worth of demand in every scenario over the next week. Total systematic strategies have reduced exposure quickly including risk parity and vol control.
IV. Equity demand CTA demand is large, but potential Fixed Income CTA Demand is massive. This is what equity folks have been looking for to get back into Nasdaq.
V. The long index gamma buffer (has also been replenished). This should limit big moves to the downside (or upside). This is the largest 3-day increase in long index gamma in our dataset.
VI. Retail traders have a tendency to get active during the summer months. Its on my BINGO card now.
