JPMorgan Chase warned in JPM Market Intel that the next round of selling will hit individual stocks hard and affect major indexes; “The current focus remains firmly on the unwinding of AI/tech/momentum stocks (MOMO)
JPMorgan Chase warned in JPM Market Intel that the next round of selling will not only hit individual stocks hard, but also affect major indexes. “The current focus remains firmly on the unwinding of AI/tech/momentum stocks (MOMO). Core concerns include competitive threats from China – namely open source models and DUV (deep ultraviolet lithography) production, although share prices of Chinese special purpose entities (SPEs) fell again today; There is also the role of revolving financing and leverage. Nvidia's credit default swap (CDS) widening spreads (as the recipient of capital expenditures, its free cash flow FCF is rising) are more worrying than the CDS trend of hyperscalers. As the risk of crowded trades in our books has not yet fully cleared, we continue to maintain factor hedges and it is important to consider whether the next step from here will be accompanied by a significant increase in index correlation.”