JPMorgan advises investors to reduce net long positions, citing uncertain risks including expectations of Fed rate hikes
On September 1, a JPMorgan trading desk said its near-term outlook has shifted to “tactical caution,” and it believes the market over the next two to three weeks may be “more choppy.” The desk said declines at the index level may not necessarily be “sharp,” but there could be “more turbulence” at the sector and individual stock levels. On sources of risk, the desk noted that policy risks from the Fed in September and beyond still need to be watched. The positioning signal currently “has not provided a clear direction.” After Labor Day, corporate credit bond issuance may pick up again, and September itself is also a month with relatively high seasonal volatility in U.S. equities. Based on this assessment, the JPMorgan trading desk advises investors to “reduce net long exposure” and consider adopting a “market-neutral” strategy. By this, the desk means that in a phase where directional signals are not clear enough and the macro event window is crowded, a portfolio should reduce reliance on one-way upside.
On September 1, a JPMorgan trading desk said its near-term outlook has shifted to “tactical caution,” and it believes the market over the next two to three weeks may be “more choppy.” The desk said declines at the index level may not necessarily be “sharp,” but there could be “more turbulence” at the sector and individual stock levels. On sources of risk, the desk noted that policy risks from the Fed in September and beyond still need to be watched. The positioning signal currently “has not provided a clear direction.” After Labor Day, corporate credit bond issuance may pick up again, and September itself is also a month with relatively high seasonal volatility in U.S. equities. Based on this assessment, the JPMorgan trading desk advises investors to “reduce net long exposure” and consider adopting a “market-neutral” strategy. By this, the desk means that in a phase where directional signals are not clear enough and the macro event window is crowded, a portfolio should reduce reliance on one-way upside.