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      Kolanovic: the next fast 10% up

      King Kolanovic, market strategist god at JPM, had a call for institutional investors where he talked about his continued bullish risk-on views:

      1. equities will rally short-term, S&P500 will hit 4.000 in Q1 and 2021 will continue to be strong

      2. vaccines "cure" COVID - there is no more sell-off potential in equities based on 2nd wave or other COVID related things

      3. CBs rule the world and the direction for equities is up; partly from the actual bid and partly from driving up multiples

      4. positioning when looked at over the longer horizon is still below average. More room for re-leveraging from the systematic and hedge fund community in 2021

      5. value and cyclicals have further to go

      6. inflation expectations will move higher

      7. USD is in a bear market and will trade lower

      8. all "known known" risks are manageable

      As much as we respect Kolanovic it is hard to tell if this is starting to become consensus or if this already is very consensus. However, maybe 2021 or at least the start of 2021 is one of these very rare moments in markets when it actually pays off to be part of the consensus crowd.

      Kolanovic: the next fast 10% up
      Source: Refinitiv
      One of the sharpest "risk on" reversals on record

      A Societe Generale index tracking cross-asset momentum has this month staged one of its sharpest reversals on record, with nine of 11 components emitting bullish signals.

      One of the sharpest "risk on" reversals on record
      Source: Soc Gen / Bloomberg
      All-in

      Much more long-term indicator, but still worth remembering. Investors are now "all-in" on stocks with the highest equity allocation in history.

      All-in
      Source: EPFR
      We are going to need a bigger chart

      US Fundamental L/S Gross leverage rose +3.1 pts to 213% which is the 99th percentile over the past 3 years.

      We are going to need a bigger chart
      Source: GS Prime