Stocks face 'meaningful' downside risk amid 'complacent' markets: JPMorgan

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As data continues to point to a resilient U.S. economy, JPMorgan strategists are warning that the equity risk/reward is “skewed to the downside.”

As Wednesday’s data continued to point to a resilient U.S. economy, strategists at JPMorgan Chase & Co. issued a warning about what could be “meaningful” downside risks in the equity market.Early results from a survey of JPMorgan’s clients this week showed that 68% were more likely to decrease their exposure to stocks in the coming days and weeks, while 32% were likely to increase it.

Seventy-two percent of respondents in JPMorgan’s survey described markets as being too complacent. January’s stock action had been driven by a “fear-of-missing-out” rally and, for a time, it seemed retail participation was on its way back, with recent sentiment among individual investors turning bullish. Other data, however, shows investors have been walking away from stock-market funds and going into bonds for weeks.

See: Top Wall St. economist says ‘no landing’ scenario could trigger another tech-led stock-market selloff

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