Markets face sharp momentum unwind amid extreme crowding, Gunjan Banerji notes

Markets face sharp momentum unwind amid extreme crowding, Gunjan Banerji notes
Markets suffer momentum unwind surge

Gunjan Banerji reports a significant momentum unwind in markets over the past month.

According to Banerji, the magnitude of the unwind was heightened due to exceptionally crowded trades, with JPMorgan indicating that such conditions raise the risk of a factor flash crash.

In recent coverage, Banerji reported that AI infrastructure stocks accounted for 40% of the Russell 2000's year-to-date return. She also noted that foreign investors increased their holdings of U.S. stocks over the past year. The recent momentum unwind comes after a period of concentrated bets in specific sectors and continued global demand for U.S. equities.

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