Troubles about recession were not the main engine sales: JPMorgan

JPMorgan analysis suggests that the recent sale of the US stock market has not been caused by concern about the economy that gets into recession.

Uncertainty as a result of the impact of the president Donald Trump The tariff plans for economics, the US and the labor market, stubborn inflation continues to strain the budgets of Americans.

“Growth problems with the US rates are often mentioned in our clients as the main reason for the US stock market remedy,” the JP Morgan analyst, led by Nikolaos Panigritzoglou, wrote last week. “Indeed, we estimate, the likelihood of recession in the US, laid down in asset classes, continued to crawl over the past week, as the risk markets suffered losses, and as the US Treasury decreased.”

However, JPMorgan’s analysts’ review suggested that correction could be caused mainly by quantitative hedge funds that use algorithmic strategies to adjust positions rather than recession concerns.

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JPMorgan analysts’ report suggests that the market sale is not mainly due to the recession fears. (Photo Ryana Rakhman/Pacific Press/LightRockket via Getty Images/Getty Images)

“The latest correction of the US stock market appears to be more due to the fund’s position adjustment and is less due to the main or discrete executives,” they wrote.

The report notes that credit markets send a less recession signal than stock and benchmark.

As of March 11, Index S&P 500 Offered 33%, referring to the likelihood of recession, while the 5-year treasury meant 46%chances, basic metals are 45%, and the Russell Index 2000-52%. On the contrary, US high -quality credit markets provided 12% of the chances of recession, and a high -yield loan by the United States is only 9% likely.

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The JP Morgan report notes that credit markets send less recession signals than other market parts. (Michael M. Santiago / Getti Image / Getti Image)

“If someone gives greater weight in credit markets and rejects the risk of recession in the US, which then explains the fixes in the US and, in particular retail investors It is unlikely to be guilty, “analysts write.

“In our heads, the most likely guilty are hedge fond and two categories: Quant Chip Funds and Equity TMT Sector Fund,” analysts said. They continued to note that the more traditional hedge funds were concentrated on long or short positions of their own capital, which played less role in retreat in the back capital, given the beta -beta beta, the financial metric that increased in February.

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“If the above assessment is correct, and Quant Fack Fack Funds has played a bigger role than their discreted colleagues, then the recent correction of the US stock market will be more due to the major or discrete executives who are re -evaluating the risks in the US,” the analysts explained.

“And when ETFS US ETFS Continue to see mainly the influx that they still have, there is a great chance that most current US market fixes remain behind us, ”they added.