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JPMorgan Sounds Warning on Market Correlations at 20-Year Highs

  • Securities moving together makes risk diversification harder
  • Credit-stock link could change amid Fed buying: JPM’s Normand

Financial markets across the globe are moving together the most in two decades, in a world where little else matters but the pandemic-driven economic trajectory and Federal Reserve stimulus.

One-year correlations across 30 assets, including convertible bonds, commodities and emerging-market shares, are spiking and upending diversification strategies for investors of all stripes, according to JPMorgan Chase & Co. analysis.