JPMorgan Cautions about Retail Investors’ Increased Stock-Buying

JPMorgan Chase and Company has warned the investing public of the melt-up in stocks due to runaway demand. The multinational investment bank is mindful of American retail investors driving the surge in stocks during the summer.


We think this US stock market news can help our readers learn about the latest developments in Wall Street. We also believe they can stay guided in navigating today’s stock market investing and trading activities with this pertinent report.


Based on the update posted online by the global business publication The Financial Times, JPMorgan analysts cited that record levels of stock-buying performed by retail investors have aided in keeping US equities marching higher through this year’s summer months.


They also remarked that these latest developments had been the dominant force that has powered a relentless rally in the stock market. US retail investors’ net purchases of exchange-traded funds or ETFs and stocks increased to record levels during the summer.


This event occurred following posting considerable inflows throughout this year, per a measure JPMorgan computed to concentrate on retail activity. This 2021, the S&P 500 index of blue-chip US stocks is also up 20 percent.


Nikolaos Panigirtzoglou remarked that the equity market would continue going up as long as retail flow carries on. JPMorgan’s cross-asset research analyst said investors should begin getting anxious about the equity market if that retail flow halts and they begin witnessing material outflows from equity ETFs specifically.


Panigirtzoglou explained that such an event should be the case, for it would translate that retail investors’ attitude towards equity markets is altering. Additionally, he cited that retail flow had been accelerating recently.


The JPMorgan analyst affirmed that this trend appears more like a “melt-up.” Panigirtzoglou pointed out that the dilemma with such a scenario is that they do not last for good.


International equity fund inflows analysts see as another sign of retail buying have pushed above US$689 billion, smashing the previous yearly record set in 2017. We think retail investors are doing the right step as they are helping in the US stock market rally.


We also think they are buying stocks increasingly during this pandemic, believing that now is the perfect moment to purchase despite the uncertainties. We gathered that the net amount of cash flowing into the markets from retail investors reached its height during the summer boom, per JPMorgan’s information.


However, we also want our readers and investors to pay attention to Mr. Panigirtzoglou’s insights. We think rosy moments in the US stock market can also turn into bleak ones. Therefore, we suggest investors stay cautious despite their increased appetite for stock-buying to protect themselves against possible adverse events.

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