Three of the largest banks in the US reveal what they think is the following for the S&P 500 after the stock market index was a major sale to start the year.
Starting with JPMorgan Chase, analysts from the largest American bank say they do not believe that rate -related headlines are the catalyst behind the recent market -wide correction, report Fox Business.
According to a team led by Nikolaos Panigritzoglou, the $ 5.5 trillion S&P 500 correction was most likely powered by two types of investment firms that adjust their positions instead of investors concern about a possible recession.
‘In our thoughts, the most likely perpetrators are equity height funds and in particular two categories: stock quante hedge funds and shares TMT sector hedge funds. “
Quant Hedge funds usually use data and code to make investment decisions, while TMT sector hedge funds mainly invests in companies related to technology, media and telecommunications.
JPMorgan says that within the empire it is the possibility that the S&P 500 is close to cutting a local soil.
“And when American equity ETFs (listed funds) usually continue to see flows in as they have so far, chances are that most of the current US stock market correction will be behind us.”
Meanwhile, Bank of America (Bofa) out The S&P 500 has more disadvantage potential before a price base is printed.
“Sentiment/positioning/price signal sharing correction is not completely over; we say that they buy SPX at 5,300 as soon as BOFA FMS (Fund Manager) approach Cash Surges above 4%, Hy (High-Yield) Spreads approach 400 Basic points, sharing outflows.”
As far as Morgan Stanley is concerned, the Giant Financial Services says that the S&P 500 is now floating in an area where the tactical rallies could ignite.
“During our call from last week, we state that 5,500 should provide support for a tradable rally led by cyclicales, lower quality and expensive growth stocks that are the hardest and where the short base is the largest.”
At the end of last year, all three banks predicted that the S&P 500 would rise to even greater heights this year. Bofa saw the index climb to 6,666, while both JPMorgan and Morgan Stanley said that the stock market could rise to 6500.
At the time of writing, the S&P 500 acts at 5,662 points.
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