Tuesday, September 8, 2015

JP Morgan Strategist: Market Losses Not Over

Robotic selling by quantitative investment funds tuned to volatility and price trends contributed to last month’s losses in U.S. stocks and is only about halfway completed, according to a JPMorgan Chase & Co. strategist.

Traders employing trend-following strategies in futures and those who use an asset-balancing technique known as risk parity probably have to get rid of another $100 billion in stocks in the next one to three weeks, wrote Marko Kolanovic in a note Thursday to clients. While down from an estimate of $300 million in research published a week ago, the derivatives strategist said investors shouldn’t consider the risk as having passed.

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