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JPMorgan Says Stocks to Suffer $150 Billion Rebalancing Sales
“The relentless rally in equities faces a fresh threat over the next few weeks with the world’s biggest money managers set to unload as much as $150 billion of stocks. JPMorgan Chase & Co. projects real-money portfolios, including those of sovereign wealth and pension funds, will tilt back in favor of bonds to meet allocation targets, in the largest rebalancing flows to the asset class since the fourth quarter of 2021. The periodic rejigging could knock off as much as 5% from the price of global stocks, according to estimates by JPMorgan strategist Nikolaos Panigirtzoglou.”
The fund flows should be looked at in the context of the US IPO levels. In a bad year, there were 62 IPOs (2008), in a good year 1,035 (2021) IPOs. These were the numbers of IPOs, and I will later find the $amounts of IPOs.
The SP500 made over 20% since 10/22 and soon will go down 5%...looks trivial to me. 150 billion sounds impressive, the 24/7 media loves to impress. Instead of saying the Dow is 1% down, they say the Dow is down 350 points.
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So, $150 billion will have some impact. The effect of fund flows is different from that of the total market-cap.
https://stockanalysis.com/ipos/statistics/
Edit/Add: $amounts $23.1 billion (2008), $130.9 billion (2021). Lower $amounts after 2008 were $19.2 billion (2009), $18.5 billion (2016).
https://www.statista.com/statistics/264607/ipo-volume-in-the-us/
150 billion sounds impressive, the 24/7 media loves to impress. Instead of saying the Dow is 1% down, they say the Dow is down 350 points.