Jeff Sica of Circle Squared Alternative Investments says that inflation is carbon monoxide in the economy.
An analysis by JPMorgan suggests that the recent sale of the recent American scholarship has not been motivated by the concerns concerning the The economy falls into the recession.
Growing uncertainty about the president’s impact Donald Trump Plashes on the economy, US trade relations and the labor market, the obstinate inflation continuing to reduce household budgets of Americans.
“The United States’s growth concerns due to pricing uncertainty are often mentioned in our customer conversations as a major reason for the recent correction of the US stock market,” a team of JP Morgan analysts wrote by Nikolaos panigritzoglou last week. “Indeed, on our estimates, the implicit probability of an integrated American recession through asset classes continued to slip into last week when the risk markets underwent losses and as the yields of the US Treasury decrease.”
However, examination of JPMorgan analysts suggested that the correction may have been mainly caused by quantitative healing funds that use algorithmic strategies to adjust positions, rather than concerns about a recession.
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A report by JPMorgan analysts suggests that market sales were not mainly motivated by fears of recession. (Photo of Ryan Rahman / Pacific Press / Lightrocket via Getty Images / Getty Images)
“The recent correction of the American equity market seems to be more motivated by the position’s position adjustments as to the shares and less motivated by the fundamental or discretionary managers of re-evaluation of the risks of American recession,” they wrote.
The report noted that the credit markets send a recession signal less than shares and a bond reference.
As of March 11, the S&P 500 index suggested a probability of an implicit recession of 33%, while the 5 -year treasure involved 46% of chance, the basic metals 45% and the Russell 2000 index a chance of 52%. On the other hand, high -quality American credit markets involved a 12% recession of recession and an American high -performance credit only a probability of 9%.
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The JP Morgan report noted that credit markets send less recession signals than other market parties. (Michael M. Santiago / Getty Images / Getty Images)
“If we put more weight on the credit markets and reject the risks of American recession, which then explains the correction of American actions and in particular Nasdaq? Looking through the types of investors, retail investors It is unlikely that it is the culprits, “the analysts wrote.” As we have pointed out in our recent publications, retail investors have continued their “lowering” purchasing “behavior in the past three weeks. “”
“In our mind, the most likely culprits are hedge funds and in particular two categories: hedge funds regarding the shares and hedge funds in the equity sector,” analysts said. They then noted that the more traditional hedge funds focused on long or short equity positions played less a role in decline given their beta of equity, a financial metric, increasing in February.
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“If the above evaluation is correct and the equity of equity for equity have played more role than their discretionary counterparts, then the recent correction of the US stock market seems to be more motivated by fundamental or discretionary managers of re-evaluation of the risks of American recession,” said analysts.
“And if ETF of American actions Continue to see mainly entries as they have done so far, there is a good chance that most of the current correction of the American stock market is behind us, “they added.
