Why Do Investors Hate Everything? Maybe Paranoia, JPMorgan Says
- Only Nasdaq, commodities, leveraged loans have outpaced cash
- Cooler earnings, tighter Fed might justify more defensiveness
Photographer: Andrew Harrer/Bloomberg
This article is for subscribers only.
Only during the 1970s stagflation period and the global financial crisis have so many asset classes had negative returns in a year. The latter may have a lot to do with why it’s happening again.
Investors now overreact to even modest changes late in cycles after not foreseeing the financial crisis, JPMorgan Chase & Co. strategists led by John Normand wrote in a note Friday. Other plausible explanations could be that the global economy and earnings have reached a turning point, or that the Federal Reserve is committing a policy error, they added.