The consensus amongst “nearly all economists” and the market supporting a smooth touchdown leaves “any margin for error,” in accordance with JPMorgan’s strategists.
“Crucially, not like a yr in the past, when nearly all economists and the market pricing had recession as a base case, each are in a smooth touchdown camp now – maybe one must be contrarian but once more,” the analysts mentioned in a shopper notice.
The banking titan anticipates that 2024 earnings projections are more likely to transfer decrease, whereas bond yields could have peaked.
The evaluation components in a contracting cash provide within the U.S. and Europe, a strongly inverted yield curve, and potential weakening of company pricing energy.
Consequently, JPMorgan is recommending its purchasers keep chubby Japan, the UK, and Switzerland, impartial on rising markets and the U.S., and underweight the Eurozone.
The strategists additionally counsel lengthy positions in utilities and actual property in comparison with brief positions in banks and autos, whereas sustaining an chubby place in telecoms and power.