Markets and Macro

This report outlines a constructive long-term outlook for the S&P 500, while cautioning that current speculative positioning and historical precedents suggest imminent summer turbulence. The recommended strategy is to maintain long equity exposure while hedging with puts and maintaining a short position in global fixed income.

Key Takeaways

• 1.The bull market remains intact with a year-end target of 8000 for the S&P 500, supported by earnings growth and US economic durability.
• 2.Summer trading conditions are expected to bring turbulence and mean reversion following aggressive recent market re-risking.
• 3.Recommended positioning is a combination of long equity delta/volatility and a short position in global fixed income.

Table of Contents

• THE TAILWINDS
• THE HEADWINDS
• WHERE I COME OUT
• THE TACTICS OF NAVIGATION