TREE NEWS reports: JPMorgan strategists led by Dubravko Lakos-Bujas said investor pessimism may be nearing its peak after last week’s momentum-trade crash, which they view as a deleveraging process. The team said signs of capitulation are mounting after the largest unwind of long-momentum strategies relative to the broader market in about 40 years, with deleveraging indicators back at levels seen during the “Liberation Day” period and sentiment shifting from bullish in June to bearish.
JPMorgan Says Investor Pessimism May Be Near a Peak After Momentum Unwind
AI take
The notable signal here is the framing of the momentum crash as deleveraging rather than a fundamental repricing, which places the current sentiment swing in the same bucket as prior stress episodes. That matters most for systematic and momentum-exposed strategies, where positioning, not conviction, is driving the move. The open question is whether the capitulation indicators JPMorgan cites actually mark a trough or simply a pause before further unwinds.
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