- Global investor sentiment most bullish since February 2025.
- Probability of hard landing lowest since January 2025, equity allocations rising, but not at extreme levels.
- Net 78% expect short term rates to be lower in 12 months’ time.
- Long Mag 7 most crowded trade say 45% of respondents, last time they said this was in March.
- 20% say Waller most likely to be next Fed chairman, 19% say Hassett, 15% Warsh.
I personally think that inflation is the biggest tail risk and not the trade war. The Fed looks like it really wants to cut now and it might be doing so into rising inflation and a resilient economy. That should actually raise the inflation risk.
Overall, the market is trading like there’s very little risk ahead. Stocks are near all-time highs, credit spreads are tight and rate cuts are coming. There’s little room for error here.
This article was written by Giuseppe Dellamotta at investinglive.com.