JPMorgan position monitor (Sept. 7) — surface volatility last week but limited
net position change. Global hedge funds raised gross exposure on four of the
past five trading days; weekly cumulative change was +1.3 standard deviations,
the largest since late June, yet net positions moved little. US-related
positions remain around the 40th historical percentile; global hedge fund net
exposure is about the 40–50th percentile over the past five years. Retail and
institutional sentiment is cooling. US healthcare shows signs of a near-term
top: retail sentiment has slipped, hedge funds are selling and ETF inflows have
stalled. Cyclicals could catch up to defensives; hedge funds are buying energy,
but only so long as bond yields do not rise rapidly enough to trigger broad
risk-off.
