To RBC, This Is The Single Largest Risk To The Market Right Now

www.zerohedge.com | 1/11/2017 | Staff
sheenabeanna (Posted by) Level 3
The US Dollar is the “grand unifying theory asset” for nearly any and all “profile” global macro or thematic equities trades in the marketplace right now, as it represents investors being long this “new” version of “economic growth.” As such, performance is significantly tied to the direction in the US Dollar.

SO THEN…let’s take it back to the “January Effect.” I’ve been doing a bunch of client marketing this week, with the ‘meat’ of the discussion being largely centered upon buy-side concerns surrounding said “seasonal mean-reversion” metastasizing into something larger. I qualify this as “something larger,” because at this time, NONE of the YTD performance reversals from Q4 have been outright PNL destroyers. Sure, popular shorts like USTs / ‘long duration,’ EM stocks, gold and equity ‘growth’ factor are all squeezing higher out of the gates—but by and large, so too are popular longs like small cap equities, inflation, copper, ‘high beta cyclical’ equities, ‘value’ factor and HY.

Fact - Ton - Money - / - Performance

The fact is, there has been a ton of money made / performance driven by, for example, ‘long Russell 2k’ vs ‘short USTs’ / ‘short ED,’ or being long equities ‘value’ against short equities ‘growth’ since back mid 2016 when we began seeing positioning pivot this way (and accelerating post-Trump). But the problem is that for many, much of that positive PNL was booked last year. So an ‘upside-down out of the gates’ January is more than inauspicious—it’s an outright “non-starter” for risk managers in light of the performance-challenged era of the past few years. Fund willingness to stomach slow starts in January to begin the year—especially in light of the proliferation of ‘tight stop’ multi-managers with a massive institutional AUM concentration, and a pod / center book structure which exacerbates crowding—can “turn wrong-way fast” when CRO’s become de facto heads of trading into...
(Excerpt) Read more at: www.zerohedge.com
Wake Up To Breaking News!
Tagged:
Sign In or Register to comment.

Welcome to Long Room!

Give Us 5 Minutes, We'll Give You The World!

LongRoom Culture
Young Elephant Is Helped Out Of A Stream By Her Aunt! Elephants are Amazing Creatures! This Baby Elephant named Lia, is at...
Javelin Missile Launch Javelin Missiles are useful in a direct-fire approach like an explosion on buildings, stationary targets,...
Mother Bear and Cubs Crossing the Road And Elk Crossing the Road! It is a good day to cross the road!  Here are the Bears!  And...
Beautiful Red Streams of Lava Flowing Into Sea In Hawaii! This colorful scene is nature at its most magnificent, the hot lava...
Bear Cub With A Clam Holding On To It's Paw! This cub stands up as if to say "Help! Mom!!"  But the clam holds firmly to his...
8 Year Old Girl Tries Bionic Hand for First Time - Amazing! Bionic technology has come a long way and makes the prospects look...
Rabbit Leaps Joyfully Around His New Sand Pit, Ending By Flopping Over! What a great idea for a bunny sand pit for bunnies...
Extreme Frisbee? Two Frisbee Players Toss and Catch An Incredibly Long Frisbee Throw! The Throw by Brodie Smith.   This...
Why Tying Your Dog's Leash To A Plastic Chair Is A Really Bad Idea! The Chair:  "It can't be bargained with. It can't be...
Man Helping Little Old Lady Across The Road Almost Runs Her Over! This good Samaritan leaves his car in neutral as he goes to...
Love Story - Klepetan the Stork Has Returned to His Crippled Mate Malena Every Year for 14 Years! On a rooftop in the village...
Colorblind Grandfather Sees Color for the First Time! This touching video is the first time this grandfather sees colors with...
A Walk In The Newly Opened Glass Bottomed "Sky Pool" In Houston, Is Terrifying! This infinity pool in Market Square Tower, a...
Incredible "Hole in Two" by Henley at Master's Tournament! This amazing shot actually stayed in the hole and caused enough...
Artistic Rock Creations Shown In A Great Slideshow! These amazing pictures made out of rocks really capture solid images that...
Father Finds Great Solution To Stop His Infant Son From Crying! Father faced with his son crying comes up with a great idea.
Alligator In A Sewer! This alligator in a sewer demonstrates that they really can be found there!  "People don't realize the...
Cowabunga! Great Curl On A Wave! The awesomeness of water is displayed quite well in this gif of a huge wave.
One Of The Most Venomous Caterpillars In The World! If you see anything like this, don't touch it, it can put you in the...
Mesmerizing Domino World Record Set - Most Dominoes Ever To Fall In A Circle! It took 18 expert domino artists ten days to set...
Huge Chicken Emerges From Coop Attracts Internet Attention! The internet has become fascinated with a giant chicken!  When this...
Video Of Massive Shredder For Automobiles Shown In Reverse! This incredible machine has ingested a car, which in this video it...
Coca-Cola Polar Bear Mascot Joking With People During Photography Session! Being a mascot is definitely a skill!  The Coca-Cola...
Adorable Kitten Drinking Milk And Wiggling Ears! Small kittens are so cute when they drink from a bottle because they wiggle...
Dog Digs Shallow Hole And Lays Down In It For A Nap! Caught in the act of taking a nap!  This beautiful dog is so charming when...
Amazing NEW WORLD RECORD Ski Jump By Stefan Kraft!!!! Stefan Kraft literally flies to this new world record!  An Austrian ski...
Closeup View Of A Tire Change During A Pit Stop! You Can See The Brakes On Fire! Pitstops are awesome to watch because the...
Cat Closes Cupboard Door as Baby is Playing in the Cupboard! The cat soundly closes the cupboard door on this baby who is...