J.P. Morgan Insights: Recent Episodes
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Back in mid-June, we noted five reasons why investing in European equities might finally pay off . One of the reasons was that Europe had crushed its COVID-19 curve and had better success than the U.S. in breaking the link between reactivating economic activity and rising infection rates. Unfortunately, daily new COVID-19 cases have begun to rise again in Europe, especially in Spain and France, to levels not seen since mid-April. This begs the question, does the recent resurgence in new cases derail the European investment story?
For investors, while the announcement does provide further clarity on future Fed action, it does not suggest any changes are warranted in portfolios currently.
While markets are likely to experience volatility in the lead up to and the aftermath of the election, ultimately, it’s policy, not politics, that matter most for the economy and markets in the long run.
Loss aversion refers is the preference to avoid losing compared to gaining an equivalent amount. Simply put, it is better to not lose $1000 than it is to find $1000.
Together, greater duration supply and less Fed buying suggests yields may drift higher through the back half of the year.
Last week, we learned that the unemployment rate fell to 10.2% in July. This week, initial claims for unemployment insurance fell below one million for the first time since March, and retail sales eclipsed the pre-pandemic levels seen earlier this year.
It has become a near daily occurrence to awaken to headlines stating that “tensions between the U.S. and China are rising”. Indeed, tensions between the two countries have risen this year, a less positive example of a pre-pandemic trend that has gotten further amplified in the COVID-19 world.
The global economy appears to be in the early innings of recovery, while simultaneously staring down the limitations to growth in a pre-vaccine world.
Last week’s GDP report showed that the U.S. economy contracted at a real, annualized rate of -32.9% in 2Q20.
The U.S. economy contracted at its fastest pace on record in the second quarter, reflecting the nationwide lockdown and halt in economic activity that took place during the quarter.
Coming into 2020 – against a backdrop of steady and stable economic growth, along with a positive earnings outlook – many investors were worried about the market highs reached over the last few years.
This recovery plan is a small step for fiscal integration, but a giant leap for Europe and European assets.
The Business Cycle Dating Committee marked the peak month of the previous expansion in February 2020, officially marking an end to the longest expansion on record.
It doesn’t happen often, but every now and then, when I get into my car in the morning, the tire pressure warning light comes on.
China’s imposition of a strict quarantine in response to the COVID-19 pandemic plunged its economy into a deep contraction in the first quarter of 2020, -6.8% year-over-year, its first negative GDP print in over 40 years.
The dramatic increase in federal debt and the expansion of monetary policy has many investors wondering if a surge in inflation is on the horizon.
May and June saw economic activity improve relative to the April lows, and we expect that economic growth will be positive in the back half of the year.
The first in a new series of commentary from the global equity research team, our experts explore the longer-term implications the global pandemic will have on consumer preferences with a focus on the remote workforce, adoption of online alternatives and increased consumer savings.
Due to COVID-19 and the discussions around social issues and climate change, Sustainable Investing (SI) is more relevant today than ever before.
The past few weeks have seen COVID-19 case growth accelerate in parts of the United States, with the total number of confirmed cases now well about 2.5 million.
Since the start of the year, the U.S. dollar has appreciated by roughly 1%, continuing a near-decade long trend that was only briefly interrupted in 2017.
One of the best trades to put on in the aftermath of the financial crisis was going long high yield.
Over the past 15 years, investors have been frustrated with the performance of European equities.
While we do not think this would precipitate a re-test of the March lows, we do believe that volatility will persist through year-end, says Lebovitz.
The Federal Open Market Committee (FOMC) met this week and provided investors with a fresh set of economic and interest rate projections after a six month hiatus.
While fundamentals– valuations, earnings and economic growth – dominate in the long run, the short run is a different matter.
Although public markets have rebounded, damage done to the real economy will lead to opportunities for private equity managers in coming quarters says Lebovitz
Overall, the rally since the mid-March lows has been swift, as investors never wait for all the stars to align, says Santos.
It's important to remember that valuations don't tell you all that much about near term performance.
The balance sheet of the U.S. Federal Reserve (Fed) has increased by 2.9 trillion USD since the start of March, meaning that in just over eleven weeks it has grown more than it did in the five years following the Financial Crisis.
Global governments have been swift and bold in supporting their economies, building a bridge to get consumers, small businesses and corporates over the present abyss to the other side. Given the unknown breadth and depth of the abyss, more stimulus may be required.
Year-to-date, emerging market (EM) equities are down -17.6%, as a combination of the COVID-19 recession and the oil price shock has led to downward revisions to earnings expectations, as well as weaker currencies relative to the U.S. dollar. However, this index level performance hides significant differences beneath the surface: Chinese equities are down only -3.2% while Brazilian equities are down -50.3% - and other countries find themselves in between the two. In general, the major EM Asia markets have outperformed EM, while EM Latin America and EM EMEA (Europe, Middle East and Africa) have underperformed.
The virus timetable could be extended further if we were to see a second wave or a pickup in infections. And therefore, the question that remains is, will the Federal Reserve do more if they need to, and what would that stimulus look like?
In the aftermath of the global financial crisis (GFC), investors have embraced equity markets as a source of income. With the COVID-induced lockdown pushing policy rates back to the zero-bound and government bond yields near all-time lows, this trend has since gained additional momentum.
Listen to Portfolio Manager James McNerny discuss how he is navigating volatile markets and the impact his ultra-short strategy. For more information on JPST or other J.P. Morgan ETFs please visit jpmorgan.com/etf.
During the first three weeks of March, investors stampeded out of riskier markets and rushed to safe assets. In the process, 100 billion USD flowed out of emerging market (EM) stocks and bonds –more than three times the outflows seen during each of the previous three risk-off periods.
This edition of On the Minds of Investors comes from, Katherine Roy, our Chief Retirement Strategist here at J.P. Morgan Asset Management. Her team oversees The Guide to (GTR), which is a best-in-class resource for breaking down and simplifying complex retirement issues like social security and Medicare.
The first quarter earnings season, thus far, can be helpful in building expectations for how things may evolve during the rest of the year, says Lebovitz.
Global markets have roiled in the face of COVID-19 and social distancing, and many investors are looking to “pick up the pieces,” eagerly hunting for the next big opportunity. Given the dramatic dislocations still present in markets, a number of potential candidates have presented themselves. With the Russell 2000 having significantly underperformed the S&P 500 year-to-date, it is tempting for investors to wonder: is now the time to invest in small cap stocks?
While significant uncertainty around the current economic situation persists, many investors are already considering what the world will look like after COVID-19.
Earlier this week, oil prices turned negative for the first time in history, with WTI trading as low as -$37 a barrel.
Turning the global economy back on will not be like a light switch, but more like a dimmer a slow and gradual process, says Santos.
It’s unlikely there will be a fundamental shift in real estate, rather, the spread of COVID-19 will accelerate trends that were already in place, says Lebovitz
With the equity market having hit its last new high on February 19th of this year, the depth and speed of the market drop has been ferocious.
Global high yield markets have been rocked by recent volatility, with risk-off sentiment, in the face of the spread of COVID-19, compounded by a collapse in oil prices driving the asset class down -16% year-to-date.
JPST audio commentary is back! Listen to Portfolio Manager James McNerny discuss how he navigated the volatile markets in March and how it impacted his ultra-short strategy. For more information on JPST or other J.P. Morgan ETFs please visit jpmorgan.com/etf.
Listen to Portfolio Manager James McNerny give a quick update on the current market environment and how it impacts his ultra-short income strategy.
Listen to Portfolio Manager James McNerny give a quick update on the current market environment and how it impacts his ultra-short income strategy.
Listen to Portfolio Manager James McNerny give a quick update on the current market environment and how it impacts his ultra-short income strategy.
Global Market Strategist Alex Dryden and Meera Pandit discuss the basics of the yield curve, what a yield curve inversion tells us (and what it does not), and what the implications are for markets and investors.
Listen to Yasmin Dahya share best thinking on broadening diversification, strengthening portfolios and dampening volatility for the road ahead.
From seeking exposure to outcome oriented investing, discover the role ETFs play in the goals-based investment approach.
You’ve seen the headlines, now hear our thoughts on the U.S.-China trade war. Our experts discuss the latest developments and their impact on emerging markets equities.
Liquidity and transparency are two of an ETF’s biggest advantages, but what do they really mean to your clients? Listen to Jillian DelSignore, Head of U.S. ETF Distribution, discuss the two advantages on Let’s Talk: Live.
The bursting of the housing bubble led to the collapse of Lehman Brothers and AIG, triggering a major global recession.
Easy money, a booming economy and investor optimism about the internet fueled huge stock market gains.
Hedge fund LTCM, used strategies to exploit small pricing discrepancies in the market, following a Russian default LTM collapsed.
In December 1994, Orange County declared bankruptcy leading 3,000 public employees to be discharged.
Description: Following sharp declines in the previous week, the Dow fell a record 508 points, or 22.8%, on October 19, 1987.
Dr. David Kelly discusses the economic and market outlook after the Federal Reserve's press conference on May 1.