The weekly SC report wasn’t published last week due to holidays in the team. In stead I post up their monthly report.
SC remain bullish on the markets though under weight materials and cyclical stocks in general. They debate the low vix vs the bullish erp reading with the summary being for a short term pull back but this being a buy the dip opportunity in their view due to valuation and positive technicals.
“Investors with underweight equity allocations should use any weakness to increase equity holdings. Indeed, the risk for these investors is the hoped for pullback fails to materialise”.
FX wise they are neutral USD, EUR, GBP and JPY. Which is where i am as well incidentally. They are over weight commodity currencies and recommend the AUD, CAD. AUD vs what is a good question? AUDUSD is a high beta trade which cuts both ways of course. AUD vs GBP is a more interesting risk return profile perhaps. The GBPAUD pair may not offer as much as the AUDUSD but on risk off event the USD could surge. Therefore the GBP may offer a better risk reward profile in my opinion that the AUDUSD.
A good report with all the details here:
Rich
(3 votes, average: 5.00 out of 5)
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