This episode explores the current state of the US equity market amidst heightened uncertainty and recent market volatility. Against the backdrop of a 10% market drop and new tariff announcements, Goldman Sachs' John Flood discusses the lack of a clear market bottom due to ongoing administrative uncertainty. More significantly, he analyzes the behavior of various market players, noting that retail investors are re-engaged, CTAs are heavily short, and long-only asset managers are largely sidelined, awaiting a potential "clearing event" on April 2nd. For instance, the upcoming pension rebalance is expected to inject significant buying pressure into the market, potentially impacting both equities and bonds. The discussion pivots to the increased exposure to European and Chinese equities, raising concerns about potential future selling pressure if market conditions worsen. In conclusion, Flood expresses tentative bullishness, highlighting the importance of the S&P 500's 200-day moving average and upcoming economic data releases as key factors influencing market direction, while recommending a short position in consumer staples.
