In today’s equity market, there has been some degrossing ahead of the Federal Open Market Committee (FOMC) meeting tomorrow. According to UBS Torsten Sippel, activity levels are subdued, with a ton of incomings on single-stock dislocations. While gold is flat, there is profit taking in Gold Miners, leading to a 2.3% decline in the UBPTMOMO Index. Additionally, there are pockets of the AI trade with the UBXXVOLT Index down 1.1%, and Rate cut winners down 1.2%. Energy is tracking crude higher.

However, not all sectors are participating in the degrossing. Low quality Credit is down 1.2%, and Profitless Tech is giving back some of Monday’s gains, with the UBXXZERO Index down 40bp. Regional Banks and Travel and Leisure are also acting poorly, with signs of degrossing in these sectors as well.

As expected, the session is quieter than usual, with US composite volume down 8% compared to Monday. UBS High Touch flows are fairly balanced to start, with Long Onlys net buying 51/49, and Hedge Funds net selling 43/50/7. The desk remains bullish on Tech, while bearish on Financials, Reits, and Consumer products.

Overall, the degrossing in Equities ahead of the FOMC meeting is a sign that investors are taking a cautious approach to risk ahead of the critical policy decision. As always, it’s essential to stay informed and up-to-date on market developments to make informed investment decisions.