JP Morgan's AI model Quant Sentiment on Federal Reserve monetary policy at multi-year low

<p>In summary from J.P. Morgan's proprietary AI quant model latest:</p><ul><li>Corporate sentiment is weak overall given financial conditions, aggregate sentiment QSI score for the S&amp;P 500 at the 32.7th percentile</li><li>
The QSI on Federal Reserve monetary policy is at a multi-year low at the 12.2 percentile, similar to levels last seen in 2008</li><li>cost of capital QSI came down at the 5th percentile</li><li>credit risk was at the 13th percentile</li></ul><p>JPM make special note on taxation and buybacks:</p><ul><li>

Sentiment on taxation is near lows at the 2.5th percentile, "in sharp contrast to very positive sentiment leading up to and passage of Tax Act in 2017."
</li><li>
"This is important given lower effective tax rates and interest expense were steady tailwinds for margins for almost three decades," </li><li>

Over the past 12 months corporate sentiment for taxation and buybacks "has reversed sharply and is at multi-year lows." </li><li>
Sentiment on buybacks "continues to fade and likely remains challenge … given already rich valuation, less incentive for debt funded share repurchases, high interest on balance sheet cash and new buyback tax."
</li></ul><p>—</p><p>The JPM Quant Sentiment Indicators are based on a proprietary artificial intelligence/natural language processing engine "that objectively measures management sentiment for key macro drivers based on public company filings and transcripts for S&amp;P 500 companies." </p><p>—</p><p>S&amp;P500 doesn't seem too fussed by all the sadness?</p>

This article was written by Eamonn Sheridan at www.forexlive.com.