Investing.com — Global equities have staged an impressive V-shaped recovery, but investor positioning has yet to catch up, and Barclays says that gap could fuel further upside.
Analyst Emmanuel Cau wrote in a note on Wednesday that despite broad re-risking across markets, hedge fund and CTA exposure remains “some way off from pre-war levels,” while retail investors have made only a slow comeback with moderate ETF inflows.
Long-only funds kept pace with $86 billion of inflows in April, but the overall positioning picture suggests, in Barclays’ view, that “there is still room for more chasing.”
The bank sees liquidity and earnings conditions as broadly supportive for equities. Global money supply is rising steadily, buybacks are set to resume as blackout periods end, and cross-asset flows tilted toward equities in April.
Bonds, by contrast, are said to face headwinds, with Barclays noting that elevated prices risk keeping inflation concerns alive and reviving fiscal dominance fears. inflows have notably outpaced wider Treasuries as a result.
Breadth, however, remains a concern. Barclays flagged that April’s rally was narrow, concentrated in U.S. tech and semiconductors, which the firm now describes as “looking crowded.”
Europe was sold, with redemptions at their worst levels since 2022, while consumer-facing sectors and what Barclays calls “AI losers”, including media, diversified financials, and insurance, remain underexposed.
From an options perspective, Cau highlighted a decisive shift from macro fear to micro chase, with falling put/call ratios and call-led activity pointing to a “crash-up” dynamic as protection demand gives way to FOMO.
With systematic support largely exhausted, Barclays says markets are now looking to earnings as the next key driver.