JPMorgan remains bearish on stocks and sees little reason to change its stance, Investing.com
Investing.com– JPMorgan analysts remain bearish on the stock and said there is little impetus to change that stance amid high valuations, restrictive interest rates and sticky inflation.
However, JPM analysts said they remained overweight on commodities and cash as they expect prices to rise across the board due to supply disruptions and improving demand.
The brokerage said its negative stance on stocks has hurt the performance of its multi-asset portfolio over the past year, but there is still little reason to be bullish on stocks.
High interest rates, sticky inflation figures, increasing investor positioning and valuations, and geopolitical uncertainty have kept brokerages broadly negative on stocks.
“We do not believe that a narrow topic like AI chips can compensate for all of the traditional market challenges that have historically run counter to cycles,” JPM analysts wrote in a note.
U.S. stock benchmarks recently hit record highs, boosted by growing technology hype around artificial intelligence. These transactions have also spread to global stock markets, boosting valuations significantly across EMEA and Asia.
Still, JPM analysts said they favor Japan and China over the United States among stocks. Japan is expected to benefit from rising inflation and interest rate hikes by the Bank of Japan, while China’s stock rally is expected to benefit from stimulus measures and relatively more support. Cheap evaluation.
In the commodities sector, JPM analysts said they expect oil prices to improve during the high-travel summer season and deepening weather risks for sugar and grains suggest a potential price increase.
Copper, which has enjoyed a spectacular rise over the past week, may be expected to see some near-term consolidation, given that its recent rise to record highs was largely driven by speculative enthusiasm rather than actual market conditions. However, JPM analysts said they still remain “bullish in the medium term” on prices.
