18 Dec 2024
Key highlights and takeaways
As we step into a pivotal new year, navigating the complex landscape of global markets requires a strategic approach backed by actionable insights and positioning and flow data. In our recent webcast, Vanda’s Chief Strategists, Eric Liu and Viraj Patel, demonstrated how leveraging proprietary positioning and flow data from VandaXasset provides investors with a clearer view of market dynamics, helping them anticipate shifts, refine strategies, and navigate uncertainty with confidence.
Here are the highlights:
Key Market Themes
- Strong Momentum Through Year-End
- Seasonal trends suggest a constructive environment for equities through December, with historical data showing an 80% likelihood of positive returns during this period.
- However, elevated positioning (1.8-1.9 standard deviations above average) indicates potential vulnerabilities in January.
- Positioning Risks and Tactical Adjustments
- Elevated equity positioning typically correlates with lower three-month forward returns, suggesting caution as we enter Q1 2025.
- Recommended strategies include defensive plays, such as long U.S. staples and owning volatility through the VIX Index.
- Inflation and Fed Policy Outlook
- November’s CPI data pointed to decelerating inflationary pressures, reinforcing expectations for a potential Fed rate cut in December.
- Nonetheless, Q1’s inflation trajectory remains a key variable, with sticky price levels potentially challenging the broader market outlook.
- International Macro Trends
- Europe: Rising yields and hawkish catalysts suggest tactical short positions in European bonds.
- Asia: Opportunities in shorting Chinese equities and currencies while exploring relative strength in Japanese markets.
Takeaways and Vanda views for January 2025
- For Q1 2025: A cautious approach is advised. Position defensively and be prepared for increased volatility in January.
- Leverage VandaXasset: Our proprietary data platform provides real-time insights into market positioning and flows, helping investors anticipate trends and respond decisively.
Want to learn more?
Access the full webinar replay and see how VandaXasset can support your investment strategies by getting in touch with sales@vanda.com