MM is a long term buyer and believer in equities but as active investors we are comfortable at times moving aggressively overweight both individual stocks, sectors and cash itself. At this stage for the first time since COVID MM has been increasing our cash position across our flagship portfolios albeit in a strategic manner looking to add alpha through re-entering at lower levels. The chart below illustrates how we envisage the US Banking Sector over the coming months, again after more than doubling we are simply looking for a decent period of profit taking before the upside trend continues.
As subscribers know the sector / market rotation is dancing to the bond market tune, banks love rising bond yields as it enables them to increase margins hence if we are correct and US & Australian 10-year bond yields are going to continue drifting lower in the near term its logical that some profit taking can ripple through the banks. NB the arrows dictate stylised trends not magnitudes.
MM is targeting a decent correction by global banks
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