Below we excerpt some thoughts on the latest market action courtesy of JPMorgan's head of cash trading (more in the full JPM Market Intel note available to pro subs).
A couple of things are starting to shift around in High Touch as pessimism looms with macro deteriorating in light of the Tariff wars and Administrative uncertainly – However, on Tuesday things appear to be changing.
- For starters, the Intl LO supply that we’ve seen for the past few weeks, is pausing. Its been pretty broad supply across sectors and ETF (non-biased supply), but today appears to be dis-engaged entirely.
- Secondly, we’re beginning to see some of the recent safe havens that have been benefactors of global uncertainty sell off dramatically. Last week UNH, today VZ, NOC and RTX are being sold on underwhelming earnings.
These have been some of the darlings in light of the overwhelming uncertainty in the market. Now the first and second factors don’t really play into each other, BUT factor 2 on its own, could create a bit of reversion (out of safety/YTD Outperformers into growth/tech/ YTD Under Performers) as that formula has been consensus for investors mandated to be invested in US have been hiding in.
Its nothing more that a crowding trade thought for those who’re aren’t selling the US. Fear remains at an extraordinarily high level and very few wants to be non-consensus for fear of broader underperformance.
But while JPM's cash trading desk is seeing a change for the better, the same can not be said for JPM's ETF trading desk, where head ETF trader Johnathan Rogerson notes the opposite:
