Stocks Can Recover on $250 Billion Rebalance Flow, JPMorgan Says

Bloomberg2022-05-23

Big funds to boost equities to bring allocations back in lineOptimistic scenario seen driving stocks away from bear marketThe world’s biggest money managers look poised to revive wilting stocks with $...

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Comments

Goupppppppp
2022-05-24
Goupppppppp
Thanks sharing.
CCYMoney
2022-05-24
CCYMoney
Yes
CCYMoney
2022-05-24
CCYMoney
What
Bonghanhuei
2022-05-24
Bonghanhuei
Ok
EHG
2022-05-24
EHG
Like
LawrenceLBC
2022-05-24
LawrenceLBC
Nice[smile]

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Morgan Stanley strategist Michael Wilson warned Monday that the main US stock gauge could fall 13% from current levels amid mounting risks to the economic expansion. Participants in an MLIV survey expect a further 10% decline from Friday’s closing level.JPMorgan had forecast a boost to global markets of as much as 10% from quarterly rebalancing flows in March -- while that proved over-optimistic the MSCI World Index nevertheless clocked up an advance of 2.5%, the only month of gains all year.Pension and sovereign wealth funds that form the backbone of the investing community typically rebalance their market exposures every quarter to get back to their allocations of 60% stocks and 40% bonds.Declines in stock market values have now left them short of their targets. To get back to balance, they’ll start to move about $45 billlion from bonds to stocks by month end, and then shift another $207 billion by the end of June, according to the US bank.Rebalancing WaveU.S. defined benefit pension plans -- which manage $7.5 trillion of assets -- would need to shift up to $167 billion into equities to meet their long-term targets and bring them back to March levels.According to JPMorgan calculations, Japan’s $1.6 trillion GPIF, the world’s largest pension fund, would have to buy $16 billion of equities to get back to its target by the end of the quarter. 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