Same Sector.
Opposite Inflation Exposure
Heading 1
Heading 2
Heading 3
Heading 4
Heading 5
Heading 6
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Block quote
Ordered list
- Item 1
- Item 2
- Item 3
Unordered list
- Item A
- Item B
- Item C
Bold text
Emphasis
Superscript
Subscript
US equity markets like the idea of Fed rate cuts so next week's US CPI is key, and not just to macro PMs - it's critical for equity L/S investors as well.
Consider a stock picker who likes Salesforce over Adobe as their favourite software name. Or the retail fund that picks Etsy over eBay. Those RV pairs are chosen for fundamental reasons.
But $CRM & $ETSY have positive exposure to US inflation expectations; $ADBE & $EBAY have negative exposure.
Their bottom-up bet performs well if CPI surprises to the upside / suffers if a recession is imminent.
This is #3 of Quant Insight's Hidden Exposure series revealing the macro risks equity L/S pairs are running.
Download the full PDF article
Related Articles
Oil Spike: Which S&P 500 Sectors Were Actually Macro?
.jpg)
Macro Fear Has Flipped to Macro Complacency
"Sell America". Sector by Sector
Copper and the Yield Curve Agree on One Thing