Barclays sees room for further buying in equities as positioning lags

Barclays says the recent V-shaped rebound in global equities could extend because investor positioning lags the market rally. Hedge fund and CTA exposure remain well below pre-war levels, retail has only slowly returned, and long-only funds saw about $86 billion of inflows in April — suggesting room for further “chasing.” The bank cites supportive liquidity and earnings conditions, resuming buybacks and cross-asset flows into equities, while bonds face headwinds from higher oil-driven inflation risks and fiscal concerns. However, breadth is narrow — the rally is concentrated in U.S. tech and semiconductors, which Barclays calls “crowded,” and Europe experienced heavy redemptions. Options activity has shifted toward call-led FOMO as protection demand wanes. With systematic support fading, Barclays views upcoming earnings as the next key market driver.