Deutsche Bank says equity positioning remains cautious even though markets are holding a tight range, according to a note published on September 18, 2026. Systematic strategies keep adding exposure while discretionary investors and sentiment surveys stay near the bottom of their ranges, and large-cap positioning trails the growth boom the bank says is currently unfolding.
Systematic strategies continue to raise equity exposure amid subdued volatility at 0.87 standard deviations in the 90th percentile, while discretionary investors have pulled back to 0.06 standard deviations in the 46th percentile, barely above neutral. Survey sentiment measures have plunged to the bottom of their long-run range at the 5th percentile.
Positioning lags the earnings growth story
Overall large-cap equity positioning stands at a modest overweight of 0.35 standard deviations in the 65th percentile, in line with earnings growth of around 10% year-over-year. Yet Deutsche Bank says this falls well short of levels implied by the growth boom currently unfolding, and it forecasts 30% growth in the third-quarter earnings season beginning in just under a month.
Markets shrug off the Fed and a wall of headwinds
The equity market reaction to the Federal Open Market Committee meeting this week followed the recent pattern of declining on the meeting day, then rallying the day after. Equities have battled sharply higher oil prices and rates, escalating geopolitical and trade tensions, and AI-related concerns while remaining in a tight range.
Across sectors, positioning stays above neutral for large-cap technology and energy, though only modestly so. Most other sectors, including cyclical and bond-like defensives, remain underweight on growth concerns, rising rates, or both.
Source: Investing.com
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