Jeff Sica of Sircle Squared Alternative Investments says inflation is the economy’s carbon monoxide.
JPMorgan’s analysis shows that recent sales of the US stock market are: The economy is in a recession.
Increases uncertainty about the president’s impact Donald Trump’s Tariffs have plans for the economy, US business relationships and labor markets, and stubborn inflation continues to strain American households.
“The concerns about US growth due to tariff uncertainty as the main reason for the recent US stock market revisions are often mentioned in client conversations,” wrote a team of JP Morgan Analysts led by Nikolaos Panigritzoglou last week. “In fact, our estimates show that as risk markets suffered losses and the US Treasury declined, the tacit odds of a US recession embedded across asset classes have crept in over the past week.”
However, a review of JP Morgan Analysts suggests that the revision could have been caused primarily by quantitative hedge funds that use algorithmic strategies to adjust positions rather than recession concerns.
Consumers loading alcohol as Trump threatens large tariffs on alcohol from the EU
JPMorgan analyst reports suggest that market sales were not driven primarily by the fear of a recession. (Photo by Ryan Rahman/Pacific Press/Lightrocket: via Getty Images/Getty Images)
“Recent US stock market revisions appear to be driven by adjustments in stock volume fund positions and not so much by basic or discretionary managers reassessing the risks of a US recession,” they write.
The report points out that credit markets are sending less recessional signals than stock and bond benchmarks.
As of March 11th, S&P 500 Index Though 33% suggested that the 5-year Treasury had a 46% chance of a basic metal, 45% and the Russell 2000 index with a 52% chance of a 52% chance of a recession. In contrast, the US luxury credit market implies a 12% chance of a recession and a 9% chance of a high-yield credit in the US.
“I’m not worried” about long-term market issues
JPMorgan’s report points out that the credit market has a lower recession signal than the rest of the market. (Michael M. Santiago / Getty Images / Getty Images)
“If you put more weight on the credit market and reject the risk of recession in the US, would you explain the revision of US stocks, especially NASDAQ? Retail Investors The analyst “continued to “buy DIP” behavior over the past three weeks,” the analyst wrote. The analyst writes.
“In our opinion, the most likely perpetrators are equity hedge funds and two categories in particular: equity quantum hedge funds and equity TMT sector hedge funds,” the analyst said. They went on to note that more traditional hedge funds focusing on long or short equity positions have not played much role in pullback given the equity beta version, a financial indicator in February.
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“If the above valuation is correct and stock-volume hedge funds play a role over their discretionary counterparts, the recent revision of the US stock market appears to be driven more by basic or discretionary managers reassessing the risks of a US recession,” the analyst explained.
“And if US Stock ETF We continue to see most of the influx as they have ever had, but there is a possibility that the majority of current US stock market corrections may be behind us,” they added.
