Ajay Rajadhyaksha on turning neutral on equities, bond market caution, and the delayed oil crisis (with Jonathan Ferro, Lisa Abramowicz, Annmarie Hordern)

Barclays' Rajadhyaksha pivots from bullish to neutral on equities, citing tightening oil inventories (80-90M bbl/week draws) and the potential impact of the Iran crisis. He warns against long-duration bonds due to worsening fiscal deficits globally, especially in the US. While earnings remain strong, a decisive break above 5% on 10-year yields would trigger equity market caution. He favors 'Mag 6' tech (ex-Tesla) for their strong forward valuations and FCF, seeing US equities as more reasonably valued than European ones. The dollar's struggle is attributed to increased hedging, not a lack of demand for US assets.

explicit

RUT

explicit

Metals

explicit

Barclays 8.5
Investment Bank $1600.00B
Ajay Rajadhyaksha 8.5

Ajay Rajadhyaksha on turning neutral on equities, bond market caution, and the delayed oil crisis (with Jonathan Ferro, Lisa Abramowicz, Annmarie Hordern)

dxy

For dollar bulls, this crisis has been humbling. There's no question. This crisis was tailor-made for the dollar... and the dollar is struggling.

1 calls

no reliable edge (random outcomes)

3/4/2026 8:50:44 AM	medium term cautious up	20 days later	+0.28%	+0.14%

ndx

I think we just stay around these ranges and probably stay like that until we have clarity on Iran.

4 calls

no reliable edge (random outcomes)

11/12/2025 8:42:17 PM	short term up	5 days later	-1.96%	-1.96%
8/20/2025 9:11:56 PM	short term cautious down	5 days later	+1.65%	-0.83%
8/6/2025 9:12:58 PM	short term up	5 days later	+1.92%	+1.92%

Show all 3 ndx results

wti

The pace at which inventories are now coming down... 10-11 million barrels a day. We are drawing down global inventories at 80-90 million barrels per week. If we continue here... another 2 to 4 weeks... it is going to start to matter.

5 calls

-5

no reliable edge (random outcomes)

3/27/2026 1:02:17 AM	medium term up	21 days later	-12.90%	-12.90%
3/4/2026 8:50:44 AM	short term up	5 days later	+3.01%	+3.01%
9/8/2025 5:00:31 PM	short term up	6 days later	+1.07%	+1.07%

Show all 3 wti results

yields

If there is a decisive breakout of 5% on 10-year yields, that is the level at which equity markets will pay attention, and not in a positive fashion.

6 calls

no reliable edge (random outcomes)

3/27/2026 1:02:17 AM	medium term cautious up	21 days later	-2.12%	-1.06%
9/17/2025 9:24:37 AM	medium term cautious down	20 days later	+0.61%	-0.30%
9/10/2025 11:46:49 AM	short term up	5 days later	+0.37%	+0.37%
9/9/2025 6:50:22 PM	short term cautious down	5 days later	+0.05%	-0.02%
9/8/2025 5:00:31 PM	short term cautious down	6 days later	-0.98%	+0.49%

Show all 5 yields results

Jonathan Ferro

Introduces Ajay Rajadhyaksha of Barclays, who was overweight risk assets last week but has now turned more neutral.
Ajay Rajadhyaksha

Explains why he was bullish on March 27: the US and China had a bigger buffer (China has 1.2 billion barrels in SPR, US is an energy superpower), the crisis was only 5 weeks old (first 3 weeks had tankers still arriving), and the starting point for global oil markets was looser than people realized with nearly 700 million barrels of inventory build last year.
Jonathan Ferro

Asks why he turned neutral.
Ajay Rajadhyaksha

The pace of inventory draws is now 10-11 million barrels per day, drawing down global inventories at 80-90 million barrels per week. If the blockade continues another 2-4 weeks with no oil flowing through Hormuz, it will start to matter.
Jonathan Ferro

Notes the consensus on the street is that the oil situation doesn't matter, only tech matters, but asks if that's about to change.
Ajay Rajadhyaksha

Would not be outright short risk because the weight of earnings is still too strong. Earnings were blowout strong and people are not questioning AI capex the way they were three months ago. Expects markets to stay around these ranges until there is clarity on Iran.
Lisa Abramowicz

Points out the S&P 500 had its best monthly gain since 2020 while benchmark yields reached cycle highs, at a time of inflation and central bank concerns.
Ajay Rajadhyaksha

There is tension in equities but it's more of a bond story. He would not touch the 10-15 year duration market globally with a barge pole. Fiscal profiles are worsening quickly in the US, UK, Japan, France, and there is no political will to do anything about it.
Lisa Abramowicz

Asks at what point the deteriorating fiscal profile challenges equity valuations.
Ajay Rajadhyaksha

For the next month, what happens in Iran will matter more for equity markets. If there is a decisive breakout of 5% on 10-year yields, that is the level at which equity markets will pay attention, and not in a positive fashion.
Jonathan Ferro

Asks about Japan intervening in FX.
Ajay Rajadhyaksha

Was not surprised by Japan's intervention; they said 160 was their line in the sand. The Bank of Japan is much further behind the inflation curve than any other major central bank and is still implementing the process incrementally.
Jonathan Ferro

Asks why the dollar hasn't strengthened more given the US economy's upside surprises and a more hawkish Fed.
Ajay Rajadhyaksha

For dollar bulls, this crisis has been humbling. It was tailor-made for the dollar (US is a gigantic energy superpower, yen and euro are energy importers). The reason the dollar is struggling is not because the world is shunning dollar assets—US Treasuries were the best-performing long bond in the developed world, and for AI exposure you have to be in the US. It's that people are increasingly increasing their dollar hedges, no longer willing to take a flyer on the dollar.
Jonathan Ferro

Asks what he likes right now if he doesn't like bonds and is cautious on equities.
Ajay Rajadhyaksha

Would still hide in the 'Mag 6' (excluding Tesla). The other six make a lot more money based on forward valuations and free cash flow. European equities have gotten ahead of themselves, the US has not. The front end of the US bond curve is still reasonable, and he does not think the Federal Reserve is going to hike no matter what.

SignalTube

markets at a glance