However, it bears noting that the flows into Chinese equities are essentially making up for outflows seen during 2022 as geopolitical tensions were ratcheting. The rise in flows towards Indian equities, however, is a new development. Traditionally, a small number of foreign investors have remained resolute in managing their holdings: these new inflows signify growing attention.

Of all types of markets and strategies, European equities and long-only funds come out the worse for wear so far. The latter highlights the adoption of a tactical mindset among institutional investors by cashing in on dip/rise situations. Rising rates have also made bank loans and government bonds increasingly attractive for said investors. The outsized shift away from commodities, in the meantime, is yet another factor indicating that recessionary pressures aren’t off the table. In a recessionary outlook, consumption is expected to dip. Therefore, the commodities outlook turns bearish.

All in all, Bank of America – unlike Dr. Burry – concludes on a “Neutral” signal on its “Bulls & Bears Indicator”, which is an accurate assessment of the state of markets. Tech narratives continue to be shaky, and the consumption outlook will continue to decline (as evidenced by the reports from Disney and Target, among others), while sector rotation is bound to continue to smooth out market concentration, and Emerging Markets — led by India and China — will continue to garner interest.

The rising utilization of tactical trading instruments such as leveraged products by institutional investors to cash in on tactical opportunities and firm up balance sheets should also be borne in mind in the weeks and quarters to come. For professional investors, there is a wealth of Exchange-Traded Products (ETPs) to choose from: SP5Y gives leveraged exposure to the upside of the S&P 500 while SPYS does the same on the downside, QQQ3 gives leveraged exposure to the upside of the Nasdaq-100 while QQ3S does the same on the downside, CHI3 gives a 3X exposure to the upside of the Chinese market while CHNS gives a 3X exposure to the downside, and IND3 gives a 3X daily-rebalanced exposure to the upside of the iShares MSCI India ETF while INDS does the same on the downside.