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Macro Insights/Report: The next move for equities
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Macro Insights/Report: The next move for equities

Let's zoom out a little

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Capital Flows
Jan 19, 2024
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Macro Insights/Report: The next move for equities
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I want to zoom out a little because people tend to have difficulty separating short-term signals from the long-term skew of assets. There is one main idea I want to focus on today:

Everyone is underweight equities!

Why do I say this and why does it matter? Think about it like this, we just finished the FED’s hiking cycle and the FED funds rate is above 5% right now.

This means there is a TON of capital in the “T-Bill n chill trade.” Everyone is collecting their risk-free return in money market funds and they feel so smart. The Bears still sound incredibly smart with their well-constructed narratives.

In this context, equities are about to make all time highs! I already noted in my most recent macro report that equities are likely to make ATHs in Q1:

Comprehensive Macro Report: Structural Support and Cyclical Trends

Capital Flows
·
January 3, 2024
Comprehensive Macro Report: Structural Support and Cyclical Trends

We are starting 2024 strong by quantifying the structural dynamics in the US economy and connecting them with cyclical trends. I write a monthly macro report breaking down growth, inflation, and liquidity to show how they impact each major asset class. If you want to see the previous macro report, here are the links:

Read full story

What do you think people are going to do when the FED starts cutting and equities make ATHs across the board? They are going to panic, pull their capital out of money markets and slam it into the SPY ETF.

SPX is almost at highs:

HYG is about to make ATHs as well:

And the NASDAQ has already made ATHs!

The crazy thing is that the cuts haven’t even begun yet! Yes they have been priced in on the forward curve but when they begin to be realized, it will cause even more capital to shift across the risk curve.

This is why Bitcoin has been rallying so much. It is sniffing out the future change.

My partner

SpearPoint Management LLC
is going to be doing a comprehensive analysis on
SpearPoint Equity Alpha
of the short-term catalysts for managing these moves and explaining HOW to generate alpha in them.

SpearPoint Equity Alpha
Spearpoint Equity Alpha Launch!
Announcement! Welcome Everyone! This is Capital Flows ! Many traders on both the institutional and retail sides are constantly trying to identify an edge to run asymmetrical trades that generate exceptional returns. The problem for most people is that they are coming up against institutional players who have an R&D budget and manpower that far outweighs individual inv…
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a year ago · 25 likes · 1 comment · Capital Flows and SpearPoint Management LLC

From a big picture perspective though, equities are very bullish.

I want to break down some shorter-term signals for execution within this larger skew though.

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