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IPFS News Link • Central Banks/Banking

JPMorgan Prime Advises Institutions To Keep Shorting Even As The Bank...

•, by Tyler Durden

One wouldn't know it from reading the "house view" research distributed for broad retail and media consumption, and to a large extent for "patriotic", political reasons, but behind the cheerful and bullish facade spun by JPMorgan's equity strategists, the bank is quietly telling a subset of its top clients that they should keep shorting the market.

This should come as a surprise - after all just a few weeks ago, with many Wall Street firms scaling back their stock market outlooks for the rest of the year, JPMorgan was adamantly bullish and in a recent note, the bank's chief US equity strategist Dubravko Lakos-Bujas said the bank is confident that strong growth lies ahead despite concerns that the recent downshift in economic and business cycle momentum will weigh on stocks. He also raised his year-end S&P 500 price target to 4,700 from 4,600, representing a 6% gain from current levels, and predicted that the index would hit 5,000 at some time in 2022.

So in light of this euphoric optimism, we found it strange that JPM's "positioning intelligence" team, a group which operates under the umbrella of the bank's Prime Brokerage team which in turn directly interfaces with JPM's institutional investor clients and provides them with ideas and insights from "top-ranked analysts, to high-touch sales and trading services, to world-class algorithmic and electronic trading capabilities" is far less enthused about the market's near-term perspective. In fact, in its latest note, the team of JPM wonder traders whose views rarely if ever make it to the broader public is advising clients on "5 Reasons Why Shorts Can Continue to Work in the Medium Term."