"Retail investors are showing early signs of rotation toward a more defensive stance"

1. Rate expectations. "The rates market has gone from pricing in over 60 bps rate cuts for this year before the Iran war, to 10 bps of hikes now. But it is still less than by what inflation is expected to rise on the back of the energy shock. The net result ... is that real rates are expected to become more stimulative (ie less restrictive) over at least the next 12 months, even though the nominal rate is expected to be higher."

2. Jobless claims. Initial claims rose by 5k to 210k (in line) during the third week of March. Meanwhile, continuing claims dropped by 32k to 1,819k (vs. 1,850k est), the lowest since May'24.

3. Implied cash allocation. "Still-low cash allocations by historical standards present a headwind to both equities and bonds going forward for as long as geopolitical and macro uncertainty remain elevated".

4. Call volume. "Net call volume is at the lowest level since the April trade tantrums of 2025. During times when it goes extremely negative durable lows have been formed in the past. Worth watching this for any signs of capitulation. None as of yet."

5. Retail activity. "Retail investors are showing early signs of rotation toward a more defensive stance - across both ETFs and single stocks."

ICYMI