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JPMORGANA analysis suggests that the recent US stock market sale has not been driven by concerns about The economy is falling into the recession.
The uncertainty of assembly about the impact of the President Donald Trump Tariff plans for economics, US business relations and labor market, while stubborn inflation continues to bind the budgets of Americans of households.
“American concerns about growth due to tariff uncertainty are often listed in our client conversations as the main reason for recent correction of the US market,” wrote a team of JP Morgan analysts last week, led by Nikolaos Panigritzogla. “In fact, according to our estimates, the assumed probability of recession in the US continued to be rooted across assets of assets last week, because the risks markets have suffered losses and how the US Treasury will decrease.”
However, JPMORGAN analysts review indicated that the repair could be caused mainly by quantitative hedge funds that use algorithmic strategies to adjust positions rather than concerns about recession.
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The JPMORGANA analysts report suggests that the market sale was not mainly driven by concerns about the recession. (Photo: Ryan Rahman/Pacific Press/LIGHTROKET via Getty Images/Getty Images)
“It seems that the recent correction of the market with equal capital in the US is more powered by adjusting the position of quantitative fund and less driven by basic or discretion managers who reconsider the US recession,” they wrote.
The report noted that credit markets send less recessive signals than stocks and benchmark bonds.
From March 11, S&P 500 Index He suggested a 33% assumed probability of recession, while a five -year cash register meant 46% chance, basic metals 45% and the Russell index 2000 52% chance. On the other hand, American high -quality credit markets meant a 12% chance of recession and an American high yield of only 9% probability.
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JP Morgan report noted that credit markets broadcast less recessive signals than other parts of the market. (Michael M. Santiago / Getty Images / Getty Images)
“If one puts more weight on the credit markets and rejects the US risk of recession, what explains the repair of US stocks and especially Nasdaq? Looking through the types of investors, Retail investors It is unlikely that they would be culprits, “wrote analysts.
“In our minds, the most likely culprits are capital hedge funds and especially two categories: shares of Quant Hedge Funds and Capital Funds TMT Sector,” the analysts said. They continued to note that the more traditional hedge funds focused on long or short own positions played less role in Pullback due to their capital beta, the financial metrics that grow in February.
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“If the above evaluation is correct and the Quants Aquity Funts Funds played more than their discretional counterparts, the recent US market correction would seem to be more powered by basic or discretion managers who have reconsidered the US recession,” analysts explained.
“And if US EQUITY ETF Continue to see mostly the tide as they have so far, there is a great chance that most of the current US correction of their own capital is over, ”they added.
