JPMorgan Sees Less Need for Hedges in Volatility Bear Market
- More stable business cycle is already priced in globally: JPM
- Normand finds lack of catalysts to take volatility higher
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Volatility is probably lower than it should be, but that doesn’t mean investors should turn defensive, according to JPMorgan Chase & Co.
Expectations of price movement across assets appear to be underestimated by about as much as they were in 2013 before the taper tantrum and in 2014 before the Federal Reserve began tightening, JPMorgan strategists led by John Normand wrote in a note March 15. That’s because volatility has drifted lower without a corresponding improvement in the macro environment, they said.