Dimon says global equities rebound as forecast

Even to hardened market veterans, the wild ride in stocks this year has been gutwrenching. Global equities delivered $8.6 trillion of losses through Feb. 11 as the MSCI All-Country World Index tumbled 12 percent. Talk of a global recession and powerless central banks could be heard from Tokyo to London to New York.

And then Jamie Dimon appeared. After the close of trading that day, news broke that the chairman and chief executive officer of JPMorgan Chase & Co. spent $26.6 million to buy shares of his New York-based bank. The MSCI soared almost 5 percent in the next four days, the start of a rally that -- barring a disaster -will put the broadest measure of worldwide equities on track this week to erase its loss for the year.

To be sure, Dimon's move -- which came as confidence in the world's biggest financial institutions was waning -- is far from the only reason for the rebound. Concern that China was about to embark on a massive devaluation of its currency has eased, oil prices are no longer in freefall and economic data have on average improved.

And yet for all the positive signals being sent by stocks, buyers aren't storming back. In fact, going by one measure of U.S. outflows, investors just yanked more money from American equities that any time since September. Enthusiasm remains bridled as a logjam of investor concerns, from China growth to ineffective centralbank policy and weakening profits, shows no signs of dissipating.

"The question everyone should be asking is what has really changed in the last three months?" said John Canally, chief economic strategist at LPL Financial in Boston, which oversees about $460 bil- lion. "Global concerns, while slightly less, are still there."

Even as benchmark measures are pulling even for the year, the rebound has been anything but unanimous. The Stoxx Europe 600 Index remains down 6.8 percent and strategists are predicting little improvement as investors assess whether Mario Draghi's negative interest rates are the right prescription for the economy. It's the same story in Japan, where the Topix index has lost 13 percent. The MSCI gauge slipped 0.2 percent at 8:46 a.m. in London.

In fact, most of the heavy lifting in the global rebound has been done not in the developed world, where an MSCI index was down 1 percent this year through Friday, but in the emerging, where shares are up 4.1 percent. The outperformance is the third-biggest of any similar stretch since 2009.

Investors of virtually all types have sold more stock than they've purchased, according to Bank of America Corp. In the week ended March 11, the bank's hedge fund, institutional and private clients sold $3.7 billion, the most since September and the seventh consecutive week of withdrawals, the company said in a note last week. Net sales by institutions were the second-biggest since recording the data.

The other issue is earnings. As economists lowered projections for this year's global growth to 3 percent from 3.6 percent in August, analysts cut profit estimates. They now expect a 2.9 percent increase in net income for U.S. companies in 2016, down from 7.1 percent in December, and profit declines in Europe. Worldwide, there have never been as many earnings downgrades versus upgrades as there are now, according to the annual averages of a Citigroup Inc. index tracking the changes.

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