Citadel Securities argues the July deleveraging reset has largely cleared, leaving several buyer groups positioned to reengage in August. Leveraged ETF assets fell more than $60 billion to $154 billion, while lower volatility, improving earnings, passive demand, and over $1 trillion of authorized buybacks could reinforce equity flows.
August Checklist
Citadel
Scott Rubner
Research
27 Pages
Key Takeaways
Leverage reset clears: Leveraged ETF assets fell more than $60 billion from June to $154 billion, reducing one major source of forced selling.
Systematics can rebuild: With the VIX near 15 after topping 20 in July, falling volatility could encourage systematic strategies to add exposure again.
Buyers reinforce demand: Companies authorized more than $1 trillion of buybacks, while passive ETF demand and returning retail investors add additional support.
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