Technology is adjusting; Bank of America warns of risks; Deutsche Bank says to overweight?

Deutsche Bank focuses on active funds, noting that institutional positions have quickly fallen from high to neutral levels. The relative performance of tech stocks has reached the lower end of a ten-year trend channel—this position has seen V-shaped reversals five times in the past two and a half years. In each rotation, technology has averaged a 32% gain, outperforming by 30 percentage points. The bank believes that both pessimistic expectations and position adjustments are already in place, and therefore upgrades its rating to overweight.Bank of America, on the other hand, focuses on systematic funds. The BofA model indicates that CTA and volatility-control “quant machine money” has not yet completed deleveraging. CTAs have already reduced equity positions this week, and if the market continues to fall, a further $6.3 billion of major sell-offs could be triggered this week. There is a warning that selling and deleveraging can easily create negative feedback loops. At present, global equity systematic positions are already above the five-year median.In summary: Tech stock positions have been cleared to a certain stage, and active capital may have completed its washout. However, quantitative systematic selling pressure remains, posing a short-term downside risk.Report sources: Deutsche Bank, "Investor Positioning and Flows"; BofA, "Selloff Drives CTA De-risking, With Further Equity Selling Still Possible"- For the full content, see the link below -