At the head of the queue are those that see good news as entirely good news! JPM was last into in the reflation trade and it appears it will be last out as well:
Cross-Asset Strategy: We maintain our pro-risk view given the ongoing recovery from the pandemic, accommodative monetary policy, and still moderate positioning in risky asset classes. We look for global GDP to surge in 2H as the laggards join in a more synchronized growth boom, as widespread vaccination allows for a sustained rise in mobility and economic activity. We view the recent reversal of the reopening/reflation tradeas driven by a combination of technicals (i.e.,position unwinds and systematic strategy flows in an environment of low liquidity) and overblown fears around the Delta variant’s impact on growth and mobility. In our view it is far too early to fade reopening/reflation trends, as we are in the early stages of the post-pandemic recovery (the world hasn’t reopened yet) not late-cycle, and inflation is likely to continue to realize above market expectations. The pull back thus creates a strong opportunity for investors to position for the outperformance of cyclical and value assets over bonds, defensive and growth. As such, we retain large OWs in equities (tilted towards value and cyclical) and commodities, funded by a large UW in government bonds.
I have criticised JPM before for its lack cognisance regarding China and its slowdown with regard to the whole reflation/commodities bruhaha. Amusingly, if one digs into its note, despite the headline bullishness there is this:
