Asset Managers Pair Back Equity Longs To A Three Year Low

With U.S. equity prices nearing or breaking year to date highs, asset managers had decreased their net long exposure to equities by $900 million, touching a three year low in net positioning. Asset managers also sold $33 billion in 10-year treasury notes over the last four weeks, a Futures and Hedge Fund Positioning report from Bank of America Merrill Lynch shows.

Asset managers selling treasury notes typically leads to oversold rally

Historically, asset managers selling treasury notes “tends to trigger oversold rally, and 10-year treasury went up 61% of the time with an average return of 0.17% over the next week, based on a total of 18 occurrences...