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.
Read More: JP Morgan Strategist: Market Losses Not Over
