JPM Flows Liquidity

J P M O R G A N Global Markets Strategy 29 July 2026

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Flows & Liquidity Deleveraging likely behind us

Global Markets Strategy Nikolaos Panigirtzoglou AC • We find that investors deleveraging in the tech and semiconductor space, ( including memory stocks, has advanced faster than we had previously anticipated. J.P. Morgan Securities plc Mika Inkinen • As a result, we now see more limited room for any further deleveraging. ( • The collapse of the odds of the Clarity Act passing by the Senate represents a setback for crypto markets. J.P. Morgan Securities plc Mayur Yeole ( Cross Asset Fund Flow Monitor J.P. Morgan India Private Limited Current level shows the latest percentile of weekly flows; Min is denoted by 0 and Max by 1. As of 22nd July 26. Krutik P Mehta ( J.P. Morgan India Private Limited

Cross Asset Positioning Monitor Current level shows the latest percentile, Min is denoted by 0 and Max by 1.

Source: J.P. Morgan Flows & Liquidity. Cross Asset Positioning Monitor aggregates across the various position indicators of Appendix ranging from positioning proxies across various futures contracts, momentum signals as proxies of how trend-following funds/ Source: Lipper, ICI, Bloomberg Finance L.P. and J.P. Morgan Flows & Liquidity. CTAs are positioned, mutual fund betas as proxies of how mutual fund managers are positioned, risk parity fund * US LL historical flows are monthly averages converted to weekly for comparison. China onshore A-share ETFs have been excluded. positioning and leverage proxies, hedge fund betas as proxies of how hedge fund managers are positioned, client surveys, asset allocation estimates of private non-bank investors at global level, short interest indicators, etc.

See page 26 for analyst certification and important disclosures.

J.P. Morgan Securities plc Global Markets Strategy Nikolaos Panigirtzoglou AC 29 July 2026 JPMORGAN (

• Two weeks ago, we argued that the deleveraging phase Figure 2: Short interest on Semiconductors ex Memory & that started in June appeared to be still ongoing and saw Hyperscalers individual stocks room for further deleveraging by investors. Two weeks Short Interest as a % share of shares outstanding. later, we find that this deleveraging has advanced faster 1.6%

than we had anticipated. As a result, we now see more Semicon ex Memory Market Cap Weighted 1.5% Hyperscalers Market Cap Weighted limited room for any further deleveraging. 1.4%

• Where has deleveraging advanced: 1.3%

• 1) Starting with hedge funds, we had already noted 1.2% signs of deleveraging in our previous publication two 1.1% weeks ago as daily reporting Equity Long/Short funds 1.0% exhibited less close relationship with semiconductor stocks. By updating our leverage proxy for daily 0.9%

reporting Equity Long/Short hedge funds with respect 0.8% to the semiconductor (SOX) index, we find evidence Jan-25 Apr-25 Jul-25 Oct-25 Jan-26 Apr-26 Jul-26

that the previous increase in leverage by equity Source: S3, J.P. Morgan Flows & Liquidity. focused hedge funds during April/May has been large- ly unwound (Figure 1). p X w O L E S h q n d b y x o m g v lti/rf()seacu Figure 3: Short interest on SMH and DRAM US Equity ETFs Short Interest as a % share of shares outstanding. Figure 1: Our leverage proxy based on volatility ratios for daily 14% 35% reporting Equity Long/Short hedge funds with respect to the semiconductor (SOX) index 30% 12% 1.2 25%

10% 0.6 SMH US 6% DRAM US (RHS) 5% 0.4 4% 0% Jan-25 Apr-25 Jul-25 Oct-25 Jan-26 Apr-26 Jul-26 0.2

Source: S3, J.P. Morgan Flows & Liquidity.

Source: HFR, Bloomberg Finance L.P., J.P. Morgan Flows & Liquidity. • 3) The collapse of momentum signals in tech heavy equity indices suggests that momentum traders such as CTAs have largely unwound previous long equity • 2) The elevated short interest on individual tech stocks positions in Nasdaq, Kospi, Taiwan and Nikkei (Fig- (Figure 2) or important…