The pain trade is down

Friday 18 August 2023

Jefferies sums it up.

It is worth noting that the Nasdaq 100 closed last Wednesday below its 50-day moving average for the first time since 10 March (see Exhibit 1). Meanwhile the traditionally bearish time of the year for sell-offs in Wall Street-correlated equities approaches, namely September and October. It should also be noted that the latest Bank of America monthly survey of fund managers published on Tuesday is the least bearish since February 2022, just before Fed tightening commenced. This suggests that the pain trade is now down in America as regards equities, not up as it has been for most of this year.

The Market Ear is more ambivalent.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.