Stock Market Today

As the Week Ahead is a rather long read (The Week Ahead – CPI and Equity Flows Test a Shaken Market), I thought I’d take some time this week to highlight some of the bigger takeaways it contained. One of those is how quickly positioning got cleaned out in last week’s AI rout.

Deutsche Bank’s consolidated equity positioning fell to the 20th percentile from the 44th, one of the sharpest weekly drops on record, with discretionary investors ending the week at the 3rd percentile to 2010, systematic at the 44th and Tech positioning at the 7th, below its liberation day lows.

Hedge funds pulled back too. Goldman’s U.S. fundamental long/short gross leverage had its biggest weekly drop since Covid, net leverage is back at the 0th percentile over five years, and this time the beta-adjusted figures came down with it (meaning there was a real cutting of risk profiles).

Goldman’s desk adds that on a trailing 20-day basis, hedge fund selling of global AI stocks is the largest in more than five years.

Cleaner positioning doesn’t call a bottom on its own, but it does mean there’s a lot less left to sell, and plenty of room to add back once things stabilize.

Check out more like this on positioning in Sunday’s The Week Ahead – CPI and Equity Flows Test a Shaken Market.

In US economic data, Monday brings us final September wholesale inventories and the NY Fed’s October Survey of Consumer Expectations.

Fed speakers include Fed Vice Chair for Supervision Bowman, Chicago Fed President Goolsbee (2027 voter) and Richmond Fed President Barkin (2027 voter).

Non-Bill (>1yr in maturity) US Treasury auctions bring us a $58B 3-year note sale at 1:00pm ET.

Seven S&P 500 components report, none of them with market caps over $100B:

• Before the open: KKR (KKR), Constellation Energy (CEG), Ferguson (FERG) and NRG Energy (NRG).
• After the close: Occidental Petroleum (OXY) and Take-Two (TTWO).
• Time not announced: Skydance (SKYD).
• Outside the S&P 500 we’ll hear from Orix (IX), Credicorp (BAP), Rocket Lab (RKLB) and AST SpaceMobile (ASTS).

Ex-US highlights China’s October CPI and PPI and the BoJ’s Summary of Opinions from its October meeting (both Sunday evening ET), followed Monday morning by Japan’s September leading index, Germany’s September trade balance, Taiwan’s October exports and Mexico’s October CPI.

The Eurogroup and ECOFIN meetings in Brussels could bring a recommendation on successors to ECB President Lagarde and board member Schnabel. G7 foreign ministers meet in France through Tuesday, and the BoE’s Bailey and the ECB’s Cipollone speak.