Displaying items by tag: JPM

JPMorgan Chase & Co issued a statement for investors to remain bullish about global equities moving forward. They believe the largest sources of risk are hawkish central banks, slowing growth in China, and global covid restrictions, but most of these threats are already priced in. Even if they aren’t quite priced in the chances of them really materializing is minimal. They remain positive as benchmark indices remain at near all-time highs. This sentiment is shared by lots on Wallstreet, like Credit Suisse. Moreover, to best take advantage of this growth, they advise to overweight Euro stocks, financial, commodity miners, and automobile manufactures.

FINSUM: The bears haven’t stopped barking but equities remain high and P/E ratios aren’t crazy, there’s room to run. 

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Strategists at JPMorgan Chase & Co see a weak market in traditional stocks and bonds coming in 2022. They say the remedy for your portfolio is in alternatives like hedge funds and real estate. It's not a small margin of victory either, JPMorgan is predicting a 6% gain in hedge funds and real estate over the traditional composition of stock and bonds. However, they are recommending investors be weary of crypto as they do expect gains but they will be too rocky to ride. In fact, volatility almost halves the value in the investment firm’s mind. JPMorgan sees macro trends dominating the funds because of a variety of factors like inflation and Fed tapering.

FINSUM: Macro hedge funds have struggled in leading up and going through Covid, but with inflation moving, the tide could be turning.

(New York)

Donald Trump wasted no time in highlighting Democrats’ big debacle in the Iowa Caucus. And interestingly, markets wasted no time in jumping on news of the issues in Iowa. In particular, bank stocks jumped across the board (from JPM to BAC and beyond) on news of the reporting issue in Iowa. Investors think a Trump re-election will be better for markets, and bank stocks are particularly sensitive as the current president is viewed as much more favorable to financial companies.

FINSUM: If Bernie ends up winning the Caucus, expect markets to take a little hit, as he (or Warren) will be the exact opposite of “good” for bank stocks.

(New York)

Bank stocks are probably not a good bet right now. They suffer when rates fall and they are quite exposed to economic slowdowns (in other words, ignore the new idea that banks are safe dividend producers like utilities). However, there are some banks and financial stocks that look likely to win in the near- to medium-term. Three names to consider: JP Morgan, Amex, and Discover. JP Morgan is basically just a very healthy bank with increasingly competitive pricing which looks likely to grow EPS nicely over the next few years. Amex is an interesting pick because it has a very high quality customer base, and its unique charge card revenue base is not so exposed to falling interest rates, making it much more defensible in a low rate/recession environment.

FINSUM: The Amex pick is quite unique. Their customer base is higher end, so less affected by recession. And their unique revenue model (for a card company) means they have lower interest rate exposure.