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A stock rally unwinding could come with no warning, JPMorgan’s Dubravko Lakos-Bujas said in a webinar.
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Concentration is so high that if one large fund begins pulling out, it could trigger a broad market fallout.
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Cracks are already showing as Apple and Tesla stocks slide.
The equity rally that’s taken stocks on a five-month tear could rupture with no warning, Dubravko Lakos-Bujas said in a JPMorgan webinar on Wednesday.
Though it’s unclear when this could happen, extreme market crowding has positioned stocks for a sharp correction, the bank’s chief global equity strategist warned.
“You might not need a catalyst, it can just come one day out of the blue and this has happened in the past, we’ve had flash crashes,” he said.
“One big fund starts de-levering some positions, a second fund hears that and tries to re-position, third fund basically gets caught off guard, and the next thing you…
