The Selloff From the Recent Bond Shock Is 'Mostly Completed,' Says JPMorgan's 'Wizard'
But short-term upside is still limited.
This article is for subscribers only.
The unwinding of risk parity portfolios and other systematic strategies in the wake of the recent bond 'Japantrum' has nearly run its course, according to JPMorgan Chase & Co. strategist Marko Kolanovic.
The bank's Global Head of Quantitative and Derivatives Strategy was likened to the wizard Gandalf last year after similar calls about market flows turned out to be quite prescient. On Thursday, he wrote that "assuming that S&P 500 momentum stays positive (most likely, in our view), and that volatility does not significantly increase further (as important central banks meetings are out of the way)," the recent forced selling from funds following systematic strategies is "mostly completed."