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JPMorgan clients, other private equity investors take measures amid possible US default
A Bloomberg report said the possible default of the US due to the government shutdown had scared private investors. Some private bank clients of JPMorgan Chase & Co had been observed raising cash. Other clients had resorted to reducing their ownership of US Treasury bills with maturities beyond October 17, which is the debt ceiling deadline for long-term bonds.
Private equity firms like Stewart Capital Advisors LLC now favor investments in more secured markets like insurance, technology and healthcare. A exchange-traded fund had been seeing its money investing in overseas equities as opposed to tracking American banks.
However, some investors were still confident about the US economy that it saw the government shutdown as another problem that would be resolved soon.
Wells Capital Management chief investment strategist Jim Paulsen said, "None of my investors have so far called me to say ‘I want out,' or ask ‘Is this really a crisis situation?' The American psyche is in much better position today. They don't look at every issue as Armageddon. It's just another problem. They are not rushing to gold or U.S. Treasuries or to the dollar."
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