LIVE MARKETS-Positioning entering neutral territory
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POSITIONING ENTERING NEUTRAL TERRITORY
Underweight positioning in stock markets and cash sitting on the sidelines have been a key factor behind the recent market rally, according to Jefferies, who now says positioning is entering more neutral territory.
"Positioning was one of the main reasons for our constructive view on risky assets over recent months," writes Jefferies economist Mohit Kumar, who says positioning for U.S. risky assets was at the shortest since 2014 around the second week of April.
Stocks have rallied since. The S&P 500 .SPX hit a record last week, having risen as much as 30% from its intraday low, while Germany's DAX .GDAXI and Britain's FTSE .FTSE have also recently scaled record highs.
While positioning has returned to neutral for stocks, Kumar says the picture in rates is not giving a clear signal.
"It is consistent with a lack of broader convictions and strong views in the market," Kumar says.
"Current modest positioning supports our view that rates are likely to be range-bound in the coming months."
(Samuel Indyk)
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