J.P. Morgan: Institutional Investors Moving to Year-End ‘Hibernation’

J.P. Morgan: Institutional Investors Moving to Year-End ‘Hibernation’

  • Posted Friday, November 20, 2009 -
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After the market's roller-coaster ride this year, the consensus seems to be building that the big players are moving to lock in a gains ahead of the end of the year. J.P. Morgan analysts write today:

2009 has been a bountiful year for institutional investors, and thus we believe many are moving into hibernation, shifting to lower Beta, expecting little upside into year-end. With a greater share of hedge funds re-attaining their high water marks and a large 33% of mutual funds beating their benchmarks, it is not too surprising that it appears trading in some stocks is becoming more difficult with volumes falling. Even the Street is bearish the median YE09 Target for Equity Strategists is 1060, a 3.2% DECLINE.

Investors shouldn't get too sleepy however, there are some upside jolts that could occur in the closing months of the year. For one thing, J.P. Morgan thinks payrolls could surprise to the upside, citing high productivity numbers they think could signal that firms will hire soon. Another source of fuel for higher stock prices? M&A, which J.P. Morgan expects to be "significantly higher than in the final months of 2008."

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