The recession fears were not the main market to sell market: Jpmorgan

An analysis conducted by Jpmorgan indicates that recent sales in the US stock market was not driven by concerns about The economy is in stagnation.

Installing uncertainty on the influence of the president Donald Trump Customs tariff plans for economics, American trade relations and labor market, with stubborn inflation in attracting American family budgets.

“American growth concerns are often mentioned due to the uncertainty in customer conversations as a major reason for correcting the last American stock market,” wrote a team of JP Morgan analysts led by Nikolaos Baigretzoglo last week. “In fact, based on our estimates, the implicit possibility of the American recession that is included in the classes of assets continued to crawl during the past week, as risk markets were lost and with US Treasury’s revenues decreased.”

However, the JPMorgan analyst review indicated that the correction may be an essential cause through the hedge boxes that use the algorithm strategies to control the positions, rather than concerns about the recession.

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They wrote: “It seems that the correction of the stock market in the last United States is driven by amendments to the position of the amount of stock funds and less driven by the main or estimated managers who re -evaluate the risk of American recession.”

The report indicated that the credit markets send a lesser signal than the stagnation from the stocks and the standard of bonds.

As of March 11, S&P 500 indicator 33 % implicitly suggested the possibility of recession, while the cabinet for 5 years involves a chance of 46 %, the foundation of metal 45 % and the 2000 A messaging index of 52 %. On the contrary, high -quality credit markets in the United States involve a 12 % chance of stagnation and high credit in the United States only 9 %.

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“If one puts more weight on the credit markets and rejects the risks of American recession, what explains that correction in American stocks, especially on the Nasdak Stock Exchange? Retail investors Analysts wrote, “They are unlikely to be the perpetrators.” We also highlighted in our modern publications, retail investors have continued their “purchase” behavior over the past three weeks. “

Analysts said: “In our minds, the most likely perpetrators are stock hedging boxes, especially two categories: the quantitative hedge funds and the hedge of the TMT stock.” They went on to have more traditional hedge funds that focused on long or short stock sites played a lower role in decline in view of the trial version of shares, a financial scale, which rises in February.

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“If the above evaluation is correct and the quantitative hedge funds in stocks play a more role than their discretionary counterparts, then correcting the last American stock market will appear to be more driven by two main managers or estimated who re -evaluate the risk of American recession,” the analysts explained.

And if US ETFS ETFS They added that most of them mostly see flows as they have so far, there is a good opportunity for most of the current American stock market to be behind us.