Decreased AUM of strategies that buy value assets
Tail risk of private assets
Increased AUM of strategies that sell on "autopilot"
Miscalculation of portfolio risk
... the quant wizard is back in a more conventional form, this time summarizing JPM's 2018 outlook for equities, volatility and tail risk.
Starting at the top, it may seem otherwise paradoxical - although in the new normal nothing surprises any more - that JPM which holds a near apocalyptic long-term forecast for the world in a derivative context, is also the bank with the highest 2018 S&P target among its bank peers.
Our price target for S&P 500 at the end of 2018 is 3,000 and our earnings forecast (including tax reform) is $153. Half of the earnings upside (~$10) is due to tax reform, and the other half due to top line growth (~$7), margin expansion (~$1.50) and buybacks (~$2.50). To reach the price target, bond yields should not rise too much as that would destabilize the equity multiple.