World trade now shrinking the most since this expansion began; JPMorgan says the sell-off in momentum is just beginning; Trump is freaking out about the need for emergency tax cuts

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  • Reversal, started by short covering, will prompt followers
  • Strategist in July called once-in-decade trade in value shares

So much economic and geopolitical fear has been built into U.S. equity portfolios that the rotation out of momentum stocks into value is likely to persist for a while, says Marko Kolanovic, the quant guru who foresaw the style reversal just two months ago.

The strategist, who heads JPMorgan Chase & Co.’s macro quantitative and derivatives research, said the rapid shift in preference started Monday with stock pickers closing bearish bets on companies seen as cheaper by measures such as price-to-earnings. Investors fearing a recession have shunned riskier assets and chased winners such as low-volatility stocks, creating a dislocation that Kolanovic called in July an almost unprecedented opportunity in value trade.


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