JPM Schlegel Weekly Wrap Let the Re Gross Begin 7 Sep 2026

JPM Schlegel - Weekly Wrap Let the Re Gross Begin 7 Sep 2026 John Schlegel · J.P. Morgan · Positioning Intelligence Mon 7 Sep 2026

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Summary: Not a lot has changed at the aggregate level over the past week, despite market gyrations, but there are some potential themes emerging such as further re-grossing by HFs, a pause in US Health Care, and a bottoming of Cyclicals vs. Defensives.

1. HF Re-grossing picked up this week: Globally HFs added gross exposure on 4 of the past 5 days for a +1.3z increase in the past week, the highest since late June.

2. Net changes were muted this week...: HF flows were mixed day-to-day but ended with a small sell skew. We saw a similar thing for our US TPM and the level of positioning for our US TPM remains at 40th %-tile, while global HF nets are 40-50th %-tile on a 5yr basis.

3. ...But sentiment turning less constructive: Both retail and institutional sentiment appear to be reversing lower / pausing, after prior increases.

4. US Health Care could be topping out for now: Retail sentiment is starting to drop from ATHs, HFs are selling, and ETF flows are pausing at highs.

5. Cyclicals vs. Defensives...will strong growth put cyclicals back in favor? Energy is being bought by HFs and relative net positioning between the groups is fairly neutral when excluding TMT and Financials. In addition, Retail sentiment between the two is quite low. The potential for cyclicals to outperform seems present, as long as yields don't rise so quickly that equities turn very risk off. Source: J.P. Morgan Positioning Intelligence, John Schlegel, 7 September 2026.