Who is Colonel Mustard, in the library, with a candlestick?
This is Jeopardy, you took “Corrections” for $2,000 and the Clue (get it?) was “This person dumped US equities during the first three months of Donald Trump’s second term as president.”
It wasn’t actually Colonel Mustard. And it wasn’t foreigners either, according to JPMorgan’s Nikolaos Panigirtzoglou (narrator: Some foreigners sold). Rather, it was hedgies, both carbon-based and otherwise.
“We believe much of the selling of US equities YTD has been driven by equity-focused hedge funds, both quant and discretionary,” Panigirtzoglou wrote, in his latest, putting total selling across the equity Long/Short crowd and CTAs at three-quarters of a trillion so far in 2025.
The figure on the left, below, shows momentum signals, which is to say a proxy for CTA trend behavior. It took a decisive turn for the bearish in February. The bottom fell out entirely just after “Liberation Day.”
On the right are estimates from JPMorgan’s futures positioning framework, which is indicative of hedge fund-selling.
Panigirtzoglou’s back-of-the-envelope math suggests CTA selling — on the long-to-short flip illustrated by Figure 3 — came to $450 billion, with the remaining $250-$300 billion of selling pressure coming from discretionary funds.
I’ll be completely honest: I have no idea whether, and to what extent, those estimates are accurate. With all due respect to Panigirtzoglou, his weeklies aren’t my go-to for these sorts of tallies.
In the same note, he wrote that on JPMorgan’s view, “some, but clearly not all” of the US stock-selling by hedge funds “reflects rotation to European and Chinese equities,” even as a meaningful share simply represents “broad de-risking.”
I loved playing board games when I was growing up and also with my kids. We still enjoy playing board games when we get together. And I have fond memories of biking over to my grandparents house to watch Jeopardy with them on their color TV, and trying to beat my Nanny to the question (she was not only very good at that game, but played it with a Manhattan, or two, in her!).
Having said that, what I want to know is who is buying? The wealthiest 1% of the US evidently controlled 34% of the wealth of the USA, as of the end of 2023 – and that percentage is growing very rapidly and not expected to decline. If that group are the buyers (after buying really expensive real estate, and other expensive stuff to telegraph their wealth- the rest has to get invested somewhere) I absolutely don’t want to sell to them…I want to hold on to what I have and quietly ride their wave.