WAM Strategy Note: May 6, 2024
WOTE US Core FICC, WOTE US 60/40, WOTE US Long/Short Equity.
US Core FICC
The WOTE US Core FICC strategy has been sitting on a neutral benchmark position in the BIL ETF all year, but following FED policy developments (FED = Fed + Treasury) last week and the NFP-driven relief rally at the long end of the UST curve, it’s time to get more active in this strategy. As such, I initiated a 50% position in the TBF -1x inverse 20y UST ETF with a target of at least the October 19, 2023 high of $26.91.
FEDeral government policymakers were hawkish last week despite dovish overtones. I strongly suspect we will see new highs in rates into June, followed by a highly attractive opportunity to go aggressively long the long end of the UST curve for a rally into Election Day.
US 60/40
As discussed this weekend in the cyclical outlook downgrade, this morning I took WOTE US 60/40 down to a 60% equity allocation.
US Long/Short Equity
This morning I swapped out of SPXS into SQQQ to concentrate short exposure in the relatively weak NDX Group.