Hey team. This was a lower volume, lower velocity week relative to the fireworks of the past month, and US equities scratched out a modest winner.
Today we break down the latest on sentiment and what we'll be looking at moving forward!
Impact Snapshot
Services PMI - Monday
Consumer Confidence - Tuesday
Q4 GDP - Thursday
Unemployment Claims - Thursday
PCE Inflation - Friday
Consumer Sentiment - Friday
Macro Viewpoint
This week, the S&P 500 was flat, and the FOMC held the policy rate unchanged as expected at 4.25%–4.5%.
While risk sentiment remains stuck in a holding pattern due to near-term uncertainties—such as quarter-end/preview season, tariffs on 4/2, and NFPs on 4/4—it was encouraging to see signs of stabilization, as positioning and valuations are no longer the headwinds they once were.
Conviction levels still feel very low—not due to price or positioning, but because of geopolitical uncertainty.
While cleaner positioning and better prices provide some reassurance, it seems investors will be inclined to keep risk on a short leash until some form of a Policy Put emerges—an important development in catalyzing potential "buy the cut" conviction as we navigate a choppier first quarter.
Wall St. Prime Intel
While the Sentiment Indicators shows how sharp recent equity flows have been, on a longer-term basis, investor positions in US stocks are still very elevated compared with history.
Directional flows show retail investors continue to buy stocks at a very strong pace, while HF net flows were negative, though a lot of the selling by HFs was in ETFs.
In today’s Wall Street Intelligence, we break down:
Where hedge fund selling has slowed
Sentiment is nearing extreme lows, and what forward S&P 500 returns historically look like when that was the case
And a potential rally that could unleash BILLIONS in systematic buying.