According to BLOCKBEATS, the geopolitical situation did not escalate further over the weekend, and risk markets rose across the board. Fixed income investors chose to remain on the sidelines ahead of Friday's PCE data, the FOMC meeting in eight days, and the SPX's busiest earnings week of the quarter. 44% of SPX companies will report earnings this week, including 5 of the "Magnificent 7".
With bonds selling off last week and stocks continuing to trade at fairly expensive all-time highs relative to fixed income, Wall Street believes investors are still comfortable going long, with the long positioning gauge set to hit a 4-year high and the SPX/Nasdaq short ratio set to hit a nearly 10-year low.
However, the negative price action last week has caused some technical damage to the stock, with SPX futures having fallen below the 55-day moving average and more than 5% away from the next 200-day moving average support. In terms of cryptocurrencies, JPM believes that BTC positions are also overweight based on CME futures contracts, and ETFs have seen outflows for two consecutive weeks, with mainstream momentum significantly weakened.