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In U.S. equities specifically, the sell-off is characterized more by bullish momentum fading and investors reducing market exposure, the analysts told investors in a note Tuesday.
“Flows were mixed in futures over the past week and took S&P 500 to just +0.7 normalised. Nasdaq 100 net positioning has turned negative (-1.1), but the move has been a result of long risk unwinds,” the analysts explained.
“As such, flows still look more like fading bullishness and reduced market exposure rather than an outright bearish stance.”
On Europe, the analysts noted that Eurostoxx recent flows are “more clearly bearish with $6bn in new shorts added in the past week, which brings normalized positioning to -1.6.”
This is also the most bearish positioning in the report, with the analyst adding that “recent trend in flows is clearly very bearish in Eurostoxx, but also in DAX and the Banks sector futures.”
