Effef Sika from alternative investment in a circle square says inflation is carbon monoxide of economy.
JPMorgan’s analysis suggests that recent US stock market sales is not driven by concerns about the economy falls into a recession.
Mounting of uncertainty about the influence of the President Donald Trump Tariffs plan for the economy, trade relations in the United States and the labor market, with stubborn inflation continues to tighten the budgets of Americans’ households.
“Concerns about US growth due to tariff uncertainty are often mentioned in our clients’ talks as the main reason for the recent correction of the US capital market,” a team of PE Morgan analysts, led by Nikolaos Pangriczglu, wrote. “Indeed, according to our estimates, the implied probability of a US recession inserted into the funds has continued to crawl over the past week, as the risk markets have suffered losses and as the US Treasury is reduced.”
However, JPMorgan analysts have suggested that correction can be caused mainly by quantitative hedge funds that use algorithmic strategies to adjust positions rather than a recession concern.
Consumers load alcohol while Trump threatens massive EU alcohol tariff
A report by JPMorgan analysts suggests that market sales were not mainly driven by recession fears. (Photo: Ryan Rahman/Pacific Press/Lygtrocket through Getty Images/Getty Images)
“The recent correction of the US capital market seems to be more managed than adjustments to the position of the capital fund and less guided by fundamental or discretional managers who review the risks of recession,” they wrote.
The report notes that credit markets send less recessional signal than capital and bond benchmark.
Since March 11, the Index S&P 500 It suggested a 33% implied probability of recession, while the 5-year-old Ministry of Finance involves 46% chance, 45% metal bases and Russell 2000 and 52% chance. Conversely, US high separate credit markets imply a 12% recession chance and a high -yield US credit only 9% probability.
The PE Morgan report notes that credit markets send less recessional signals than other parts of the market. (Michael M. Santiago / Getty Pictures / Getty Pictures)
“If anyone puts more weight on the credit markets and rejects us the risk of recession, which then explains the correction in American capital and especially Nasdak? Investors for retail Analysts wrote. “As we pointed out in our recent publications, retail investors have continued their behavior” purchasing dip “over the past three weeks.”
“According to our minds, the most likely culprits are hedge funds in capital, and especially two categories: capital hedge funds and TMT sector funds,” analysts say. They continued to note that more traditional hedge funds focused on long or short capital positions played less than the role in withdrawal given their capital beta, financial metrics, increasing in February.
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“If the above estimate is correct and the hedge funds from capital played more than the role of their discretion colleagues, then the recent correction of the US capital market seems to be more driven by fundamental or discretional managers who rethinked the risks of recession,” the analysts explain.
“And if American Capital ETF Keep watching mostly as they have so far, there is a good chance that most of the current correction in the US capital market stands behind us, “they added.
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