Breaking News
Close
0

JPMorgan Strategists Say Buy Stocks as Rate Hikes Now Priced In

Stock Markets Feb 07, 2022 08:00
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

(Bloomberg) -- After a bumpy start to the year, the risks facing global stocks are now priced in, according to JPMorgan Chase & Co.'s (NYSE:JPM) Mislav Matejka. 

Neither the Federal Reserve nor the European Central Bank will move further into hawkish territory, “at least relative to what is priced in currently,” strategists led by Matejka wrote in a note on Monday. Meanwhile, headline inflation is peaking and earnings are likely to surprise positively. “We believe that equities still offer upside, and that the cycle is far from over,” they said.

U.S. and European stocks started the year on the wrong foot amid fears that more aggressive monetary tightening to tame inflation will lead to a sharp slowdown in economic growth. While a solid earnings seasons is helping to alleviate some concerns over a less forgiving macroeconomic backdrop, equity markets have remained volatile, and strategists are divided about the outlook for the rest of the year.

“We think it is wrong to position for a recession, given still extremely favorable financing conditions,” very strong labor markets, strong corporate cash flows and the likely bottoming of economic growth in China, JPMorgan’s team wrote.

By contrast, Morgan Stanley’s chief U.S. equity strategist Michael Wilson today reiterated that “winter is here,” for stocks.

“Earnings risk is increasing for a wider swath of the market than most investors expect as rising inventories meet waning demand,” strategists led by Wilson wrote in a note. They listed the earnings disappointments of pandemic market darlings including Netflix Inc (NASDAQ:NFLX), Paypal Holdings (NASDAQ:PYPL) Inc. and Facebook (NASDAQ:FB) owner Meta Platforms Inc. as examples of the “payback for last year’s over consumption.”

While Wilson recommends investors position defensively for more downside, JPMorgan’s team says investors should follow the opposite strategy, with an underweight position on traditional defensive sectors such as real estate, consumer staples and health care stocks.

©2022 Bloomberg L.P.

 

JPMorgan Strategists Say Buy Stocks as Rate Hikes Now Priced In
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalised Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email