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JPMORGAN Analysis suggests that a recent US market sale was not triggered by concern the economy that falls into a recession.
Increasing uncertainty about the influence of the President Donald Trump Tariff’s plans for economics, US trade relations and labor market, and stubborn inflation continues to burden the Americans’ budgets.
“American growth because of tariff uncertainty is often mentioned in conversations with clients as the main reason for the recent correction of the capital market in the US,” wrote a team of analyst by JP Morgan, who led Nikolaos Panigritzoglou last week. “Indeed, according to our estimates, the likelihood of American recession embedded in the asset class continued to increase over the past week because the risk of risk has suffered losses and how the US treasurer brings declines.”
However, the inspection of JPMORGAN analysts has suggested that correction may be caused by quantitative hedge funds that use algorithmic strategies to adjust positions, not concern about recession.
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The JPMORGAN Analyst report suggests that market sales were not generally guided by the fears of recession. (Photo Ryan Rahman/Pacific Press/Lightctics via Getty Images/Getty Images)
“It seems that the recent market correction in capital is more triggered by the adaptation of the capital position and less guided by basic or discretionary managers who have re -examined American recession risks,” they wrote.
The report states that the credit markets send a smaller recession signal than the stock and the bond measure.
From March 11, S & P 500 index It suggested 33% implied the likelihood of a recession, while a five -year treasury implied 46% chances, base metals 45% and Russell 2000 index 52% chance. In contrast, US high quality credit markets implied a 12% recession chance of a 12% recession, and an American high loan only 9% likelihood.
The JP Morgan report states that the credit markets are sending a smaller recession signal 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 American risk of recession, then explains the correction in US shares, and especially Nasdaqu? retail investors Not likely to be guilty, “analysts wrote.” As we have pointed out in our recent publications, retailers in retail have continued their behavior of the “Busying of DIP” in the last three weeks. “
“In our mind, the most likely culprits are capital protection funds, and especially two categories: capital protection funds and Capital TMT sector Hedge funds,” analysts said. They continued to mention that more traditional hedge funds focused on long or short capital positions played less roles in their return with respect to their beta version, the financial metric, in February.
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“If the above assessment is accurate and quantum protective capital funds have played more role than their discretionary colleagues, it seems that the recent correction of the US market market would be more triggered by fundamental or discretionary managers who re -examine American risks for a recession,” analysts explained.
“And if US Capital ETFS Continue to see mostly appearances as they have so far, there is a high likelihood that most of the current correction of the US capital is behind us, “they added.
