JPMorgan global market strategist Nikolaos Panigirtzoglou and his team believe the recent semiconductor sector sell-off indicates most long positions have been unwound, including those held by momentum investors. While short-term headwinds persist, this positioning adjustment may limit further downside in the broader stock market.
The JPMorgan team also addressed concerns over financing risks for new cloud companies. Despite acknowledging that rising financing costs pose some challenges, they noted extremely strong demand for computing resources allows relevant companies to pass cost increases to end customers. Even if financing becomes unfeasible, the bank does not believe the mismatch between capital expenditure and revenue will undermine the industry's overall growth cycle.
JPMorgan: Stock Market Sell-Off May Be Nearing Its End as Semiconductor Longs Unwind
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