JPMorgan says global stock market party is not over

“Stay fast – the positive catalysts don’t end there,” strategists led by Mislav Matezka wrote in a note to clients on Tuesday. Downside risks – including a sharp turn by central banks, a slowdown in China’s economy, or more significant coronavirus restrictions – will either fail to materialize or are already priced in stocks, he said.

The positive outlook comes as benchmark indices in both the US and Europe hit record highs, following last year’s brutal rally on the back of unprecedented fiscal stimulus and a solid rebound from the pandemic-induced slowdown.

JPMorgan strategists aren’t alone: ​​Credit Suisse Group AG reiterated a bullish outlook on U.S. stocks this week, while Societe Generale SA reiterated on Tuesday a forecast for a 6.6% return for European stocks this year, writing that “This bull market is not over.” Goldman Sachs Group Inc. And strategists at BlackRock Investment Institute also see the upside with a more muted pace.

JPMorgan’s key calls include overweight positions on UK and euro-regional equities as well as banks, miners and autos. Strategists see emerging market stocks as a good entry point, with China’s slowdown “largely behind us so far.” They also like to reopen trades.

He recommends a neutral position on U.S. stocks, saying, “If technology starts to outperform they could relatively stall.” Still, the overall technical picture is positive for equities, as should inflation peak in the first half, the Fed is unlikely to become more flustered, and consensus earnings growth projections “will again prove too low.”

This story has been published without modification in text from a wire agency feed. Only the title has been changed.