Institutional investors are driving market moves today, according to the latest QDS models. The data shows a broad-based supply of $7 billion in futures (2nd percentile), $3 billion in cash (10th percentile), and retail flows that are flat (13th percentile) for this time of day. While retail investors make up only 4% of total volume, the recent move lower appears to be more futures-led.

Zooming out, elevated systematic leverage remains a risk, but hedge funds’ nets have decreased to 53% from 56% two days ago (now 63rd percentile) with shorts being added all week. Despite this, HF P/L is still strong (+11% YTD), hedge balances remain high (93rd percentile), and liquidity tightening has normalized since earlier in the week (SRF usage is down to zero and SOFR has fallen). Retail investors have generally been buying, although concentrated more in large-cap names.

QDS models don’t show much systematic supply into next week on the back of these moves, with roughly $5-$10 billion for sale. CTAs are unlikely to flip to shorts yet, according to QDS’s view. At these levels, leveraged ETFs have $12 billion for sale today, overwhelming the option long gamma to buy of $5 billion, although it’s early in the day and this should be reflected in prices by the close.

Overall, institutional investors appear to be driving market moves today, with retail flows remaining muted. While there are some signs of risk appetite returning, elevated systematic leverage remains a concern. Hedge funds’ nets and P/L are strong, but liquidity tightening has normalized, and retail investors continue to buy, albeit concentrated in large-cap names.