Nomura Research flags a scope for further rally in global equity markets in the near-term.
"Trend-following algos seem to have fallen behind in buying US equities Global equities continue to rally. In addition to continued movement in "vaccine trades" (various trades that reverse the "pandemic trades" seen thus far based on speculation that a vaccine will be widely available soon, such as selling momentum and growth or selling USTs), speculative investors have picked up the pace of their rebuilding of long positions in equity," Nomur notes.
"In terms of supply and demand, investors in various markets now seem more wary of the risk of being late to participate in the rally than they are of overly high prices. Global equity markets appear to be following a path toward a melt-up paired with FOMO," Nomura adds.