Possible scenario

Fund Deleveraging Contagion

15%its chance, of the story’s futures

−1.4%on the S&P 500, if it happens

Losses of up to 24% at macro funds lead to broader emerging-market risk reduction beyond Brazil. The key question is whether the deleveraging remains a positioning event or spreads into wider credit and commodity markets.

What it moves

Finance−1.5%
Non-Energy Materials−1.5%
Riskier companies' borrowing costs▲ up
Market volatility▲ up

Sectors in percent; other series by direction only.

Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.

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