Investing.com -- JPMorgan analysts said in a note Thursday that “credit markets are once again more dismissive of US recession risks than equity or rate markets,” echoing previous recession scares from the last two years.
Despite the recent correction in US equities, JPMorgan (NYSE:JPM) noted that the move “appears to be more driven by equity quant fund position adjustments and less driven by fundamental or discretionary managers reassessing US recession risks.”
The analysts pointed out that retail investors have continued their “buying the dip behavior” over the past three weeks.
“Since the peak in US equities on February 19th, there has been only one day of outflows from US equity ETFs on February 28th.”
The note also highlighted the potential for significant equity buying at month- and quarter-end.
“We estimate the potential equity buying from month-end rebalancing by balanced mutual funds as well as quarter-end rebalancing by US defined benefit pension funds and Norges Bank/GPIF/SNB at around $135bn,” wrote JPMorgan.
On the rates side, JPMorgan's momentum trader framework is said to suggest that “the short momentum on 10y Bunds is in extreme territory both on an outright basis and in particular relative to 10y USTs, suggesting some risk of mean reversion signals being triggered.”
Publicly listed Bitcoin miners were also mentioned in the note, with the analysts expecting them “to continue to gain share in the overall bitcoin network hashrate during 2025.”
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