Institutional investors are becoming more bullish: The average funding spread jumped ~20 basis points over the last several days to its highest level since December 2024. This gauge measures institutional demand for long stock exposure through futures, options, and swaps. The surge took place after disappointing non-farm payrolls data 2 weeks ago, which raised bets on more interest rate cuts from the Fed. Overall, professional investor positioning has been gradually recovering since April. However, the funding spread is still well below the peak levels seen in November 2024. Institutional investors are catching up.(The Kobeissi Letter)