“Through the first two months of the year, long/short equity hedge funds and mutual funds were neutral the market but long growth stocks, which helped underpin outperformance through the January-February sell-off. The rotation out of growth and into value starting in early March hurt and funds were forced to unwind positions.” (Deutsche Bank)
Spanish and Italian 5-year government bond yields are now below those of the US.
There is still a real threat of deflation across Europe and some countries are already experiencing deflation, but “Whatever it takes” has had a huge impact on debt markets.
“We currently see Ukraine as largest tail risk to our allocation. We still expect the impact of the situation in Ukraine on global markets to be limited. But, further escalation could change this.” (Goldman Sachs)
“Nordic EPS revisions remains stubbornly negative, 93 downgrades and 43 upgrades.” (Handelsbanken)
Complete disconnect between PMI and EPS revisions.
Seasonal stock market performance.
Uncomfortably low inflation. Inflation rates have surprised to downside.
“Performance over the last month across stocks and sectors has been driven by position covering. Coming into the first quarter of 2014, growth stocks and the stocks with the highest hedge fund ownership were one and the same.” (Deutsche Bank)