Displaying items by tag: jp morgan

(New York)

Goodbye bearishness, hello risk-on. JP Morgan took a pivot from the rest of the Wall Street research machine today and took some bold steps in its allocation recommendations. The bank said that investors should take money out of gold and other risk averse assets, like government bonds, and put it into risk assets like stocks. The bank’s strategy team said “We maintain a significant and incrementally larger tilt in our model portfolio towards risky assets, based on signs of a cyclical recovery, easing geopolitical tensions, synchronized monetary easing, and defensive investor positioning across asset classes”.

FINSUM: The clouds do seem to be parting a bit, but there are still a lot of x factors—which is exactly the reason this could turn out to be a very good call.

(New York)

JP Morgan has gone on the record with two worrying recession warnings this week. The first came from the consumer focused analyst in their research division, who warned that the US consumer—who has been the key support for the economy—will weaken rapidly in 2020. Now, the analyst at JP Morgan who covers GE says that markets are likely to sink alongside falling economic expectations. The key point being made is that just having lower expectations won’t allow markets to rebound. “Don’t expect to see enough to justify a meaningful rebound in sentiment”, he said.

FINSUM: The whole of the economy, other than consumers, has been pretty weak lately. If the consumer falters, it is hard to imagine the US staying out of a recession for long.

(New York)

Well they might not have exactly said what is in this headline, but they might as well have. The bank is urging investors to rotate into European equities and out of US stocks, shifting the former to “overweight” and the latter to “neutral”. The bank argues that European stocks represent a much better value after their underperformance over the last year. They believe European stocks have a great deal of upside and look close to “outright cheap”.

FINSUM: European stocks do seem to have a lot more room to move higher, but they also have a giant morass staring them in the eye called Brexit.

(New York)

It has been a rough road for equities this month. Benchmarks are down 5% and there has been frequent whip-sawing action based on data and news over the trade war. Despite the fears, JP Morgan is telling investors that it is time to buy. The bank’s equity strategists, led by Mislav Matejka think that stocks are going to turn the corner very soon. The bank thinks three elements may catalyze a move higher into the year end—restarted ECB easing, a bigger than expected Fed rate cut, and improving technical indicators on signs the market has bottomed out.

FINSUM: The Fed and the ECB could certainly help support stocks, but it hard to imagine benchmarks gaining much if we keep up the frenzy of trade war news.

(New York)

There has been a lot of speculation about whether there may be rate cuts this year. The Fed has been less than clear about this possibility, mostly indicating it just wants to stay put for the year. The Treasury market has been very vocal, however, with investors clearly indicating they expect rate cuts over the second half of the year. Now JP Morgan is weighing in, saying that the Fed is likely to cut rates twice by the end of the year, a prediction which precisely matches what markets are calling for. The ten-year Treasury yield fell below 2.1% recently.

FINSUM: We think the cut will come as a function of how the trade war plays out. Trump is certainly pushing the Fed’s hand, but we expect the central bank will remain “data dependent”.