In today’s briefing:
- Nigeria Goes to the Polls – What Will Happen if Obi Wins?
- Positioning Watch: Investors Are yet Again Short Bonds..
- TPW Advisory Friday Musings: No Need To Chase
Nigeria Goes to the Polls – What Will Happen if Obi Wins?
- Africa’s most populous country, Nigeria, is headed for presidential elections on February 25th amidst democratic backsliding on the continent.
- Young Nigerians hope that outsider, Peter Obi, can shake up Nigeria’s de-facto, two-party system. Obi is ahead in the polls but will face steep opposition in majority-Muslim states.
- Overall, the best outcome for investors has less to do with the result and everything to do with how the election is conducted – namely ‘fairly, freely and peacefully’.
Positioning Watch: Investors Are yet Again Short Bonds..
- Equity positioning: No love for tech stocks, consumer discretionary, while overall positioning remains VERY short
- FX positioning: Market is too long NZD, while traders are not really buying the USD rebound
- Bond positioning: Shorts are getting crowded again after hawkish Fed rhetoric
TPW Advisory Friday Musings: No Need To Chase
- We have written extensively about cross asset market dynamics going back to Things I Don’t Understand last October to Stocks & Bonds – Only One Can Be Right to last week’s Two Steps Forward, One Step Back.
- It seems fitting to unite these thoughts this week when the US narrative flipped from recession and rate cuts to no landing, solid growth and no rate cuts but rather more rate hikes.
- We covered this dynamic in our most recent Monthly: Narrative Speed where we discussed how narratives are flipping faster than ever and the avalanche effect of small changes leading to one big cumulative moment when the script is flipped.
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