All into Account: Recent Episodes
J.P. Morgan Global Research
Thought leaders from J.P. Morgan Global Research discuss cross asset investing and highlight key trends impacting financial markets.
In this podcast Joyce Chang, Chair of Global Research is joined by Virginia Martin Heriz, JX Hecker and Paul Xu in J.P. Morgan’s ESG Research team to discuss the current landscape dictating the future of ESG, including the political backdrop under Trump 2.0, geopolitical risks, the US-China strategic competition and the rising energy demands from data center expansion to fuel the AI revolution, as forces that are reshaping the supply chain and energy demand.
J.P. Morgan Speakers:
Mohammed Hossain, Strategic Research
Joyce Chang, Chair of Global Research
Virginia Martin Heriz, Head of ESG Research Methodology and Integration
Paul Xu, Asia Pacific ESG Research
Jean-Xavier Hecker, Head of ESG & Sustainability Research
This podcast was recorded on 15 January 2025.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2025 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
As geopolitical dynamics shift, we explore the potential impacts on oil markets, considering both the immediate risks and the broader implications for global energy stability.
Featured in this podcast is Amy Ho. As the new world order fosters regionalization and new alliances, we explore the implications for globalization, industrial policies, and shifting international trade dynamics.
This podcast was recorded on Nov 18, 2024.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved.
Demography is destiny and thus a critical consideration for the long-term investor. What are the long-term trends and how will they affect markets?
Speakers:
Jan Loeys, Long-term Strategy
Alexander Wise, Long-term Strategy
This podcast was recorded on 9 October 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4800176-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Fabio Bassi joins us to discuss ECB outlook and duration views. Idiosyncratic macro dynamic came to the forefront of rates markets this week with a notable outperformance of EUR rates in a bull steepening move, driven by weak Euro area flash PMI for September and selective inflation data in France and Spain. Higher conviction in the broad disinflation process in the Euro area and downside risk on growth triggered a change in our ECB call, now expecting the ECB to deliver back-to-back 25bp cuts starting in October, reaching 2% policy rate in June 2025, Risks are biased for even lower terminal even in absence of a recession.
Speakers:
Thomas Salopek, Head of Cross Asset Strategy
Fabio Bassi, Head of International Rates Strategy
This podcast was recorded on 2 October 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4806192-0, https://www.jpmm.com/research/content/GPS-4802900-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Rie Nishihara, Head of Japan Equity Strategy
Junya Tanase, Chief Japan FX Strategist
This podcast was recorded on Sept 25, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4797455-0 and https://www.jpmm.com/research/content/GPS-4799897-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Daniel and Nelson join us to break down the differences between the European and US High Yield and Leveraged Loan markets, aka comparing apples and oranges. We do a thorough comparison of the asset class universes in terms of ratings and industry composition, and how this has played out in terms of spreads and returns.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Daniel Lamy, Head of Europe Credit Strategy
Nelson Jantzen, Head of US High Yield and Leveraged Loan Strategy
This podcast was recorded on September 12, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4779883-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Jason Hunter discusses bearish Sep-Oct equity seasonality, critical chart support for the semiconductor group, and the potential that the spring-summer price action marks a large top pattern on the heels of the 2022-2024 bull market. He also highlights the 2s/5s yield curve longer-term base pattern breakout and the prospects for a steepening trend acceleration.
Speakers:
Jason Hunter, Head of Technical Strategy
This podcast was recorded on September 10, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4791254-0 and https://www.jpmm.com/research/content/GPS-4789122-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Featured in this podcast is Rajiv Batra. The Indian Equity Market has remained resilient in the face of volatility in global markets. As such, we discuss how the Indian markets are positioned and what are the opportunities and challenges that lie ahead.
This podcast was recorded on Aug 29, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://jpmorganmarkets.com/research/content/GPS-4763283-0, https://jpmorganmarkets.com/research/content/GPS-4760727-0 and https://jpmorganmarkets.com/research/content/GPS-4725824-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved.
Jason Hunter discusses the sharp July trends across fixed income, currency, equity, and commodity markets. While they look more technical and position-driven at the moment, the late-cycle signals coming from cross-market relationships and lower-frequency pattern development suggests the summer shifts can mark the start of something more durable.
Speakers:
Jason Hunter, Head of Technical Strategy
This podcast was recorded on 25 July 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4742587-0, https://www.jpmm.com/research/content/GPS-4753546-0, https://www.jpmm.com/research/content/GPS-4734633-0, https://www.jpmm.com/research/content/GPS-4745567-0, https://www.jpmm.com/research/content/GPS-4745703-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
The consensus view in the first half of the year has been to buy Cyclical sectors on PMI rebound, and also to favour consumer exposure on an improvement in real disposable incomes. While we have some sympathy with the view that European consumers could fare better this year than last, on falling inflation and on rate cuts, we have argued through Q2 to play a barbell of Defensives together with Mining. Stylewise, we entered the year again OW Growth vs Value, same as last year, and keep that view, for now. Also, one should note the terrible performance of small caps everywhere again this year - behind by 15% in the US, 3% in Europe and 11% in Japan so far in 2024. Within this, we have very recently advised to finally turn more bullish on some selected small caps, such as FTSE250 in the UK, to take advantage of the heavy prior underperformance and political changes. On the short side, we have specifically focused on Consumer Cyclical plays - such as Autos and Luxury, and now the question is whether one should use the recent weakness in the space to add. We think that there is likely further underperformance ahead, on likely unwind of prior strong pricing power, building margin squeeze, likely softening final demand and potential labour market weakening: Autos (UW): expecting continued pricing weakness and rising China competition. Luxury (N): softer pricing. Discretionary Retail (UW): Retailers have seen a series of profit warnings recently, including H&M and Nike. While higher freight costs and cotton prices have been key headwinds so far, potential consumer weakness going forward is likely to lead to further disappointments. Hotels, Restaurants & Leisure (UW): the high-end segment is holding up, but the low-end segment is showing signs of weakness. Airlines (UW): extra capacity and more downbeat demand expectations have weighed on Airlines stocks, down 20% relative in last 3-4 months. Bigger picture, CESIs have moved negative recently in a number of key regions, in US, Eurozone, China and Japan. Typically, when CESIs deteriorate, sector leadership is lower beta. Apart from Cyclicals, Financials in particular tended to consistently underperform when CESIs move lower. Banks could also see peaking profits on ECB cuts.
This podcast was recorded on 06 July 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4739144-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
SPW, an equal-weighted S&P500 index, has stalled since March, and is behind SPX so far this year by more than 10%. We think this is reflecting a changing Growth-Policy narrative vs early 2024. Entering this year, investor expectations were for a Goldilocks outcome – growth acceleration and at the same time quick Fed easing, starting already in March. The early Fed cuts and the consequent improving credit impulse didn’t materialize, which should weigh on growth in 2H. US activity momentum is slowing, with CESI outright negative at present, putting EPS growth projections of as much as 15% acceleration between Q1 and Q4 of this year at risk. Instead of easing preemptively for market-friendly reasons, such as falling inflation, as was the view at the start of the year, the Fed could end up easing, but reactively, in a response to weakening growth. At the same time, there is no safety net any more, the market is positioned long, Vix is at lows, potentially underpricing risks and credit spreads are extremely tight – this is as good as it gets. Adding to the picture strengthening USD and elevated political uncertainty currently, we arrive at a problematic setup for the equity market during summer. In terms of positioning, we have entered this year again OW Growth vs Value style and Large vs Small caps, and we are keeping these for 2H in the US, not expecting much broadening. The recent relative dip due to French political uncertainty is likely to become a buying opportunity as we move through 2H, but we think the risk of further drawdowns is not finished, as the potential new French government will likely try to test the limits of what they can do.
This podcast was recorded on 30 June 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-GPS-4735603-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
After meaningfully lagging the US in 2nd half of last year, Eurozone equities showed some relative stabilization in Q1/Q2, before breaking lower most recently on a spike in French political uncertainty. We have closed the UW on Eurozone vs the US in Q1, driven by the improving Growth - Policy tradeoff in the region, but we believed that it was too early to expect Eurozone to move to an OW vs the US. Now, should one use the current dip to go long? On the positive side, Eurozone CESI is significantly above US one. At the same time, ECB has started easing, while Fed could stay higher for longer, and Eurozone valuations relative to the US are as cheap currently as at the extremes of TMT sell-off, GFC and Euro peripheral crises. Having said that, Eurozone equities are not showing oversold extremes. In fact, on equal weighted basis, Eurozone stocks were trading above US in Q2, and that is still the case, even fully taking into account the French driven weakness. The key will be any improving visibility with respect to the political backdrop. Here, we do not see the current French risks as a game changer for the region. The institutional setup is much more robust than during initial Euro crises. While the snap elections offer increased near term risks, they might be reducing longer term ones, and French government bond spreads to Germany are up 30bp, only higher during 2011 extremes. Now, we do fear that proverbially things might need to “get worse in order to get better”. The chances are that a potential new French government will likely try to test the boundaries of what they can do. Financial markets might end up needing to push back against the more aggressive fiscal easing. Given this, the risk of further drawdowns will likely not be elevated only between the two rounds of voting and in the immediate aftermath, but also for a while post elections. Overall, we think that, as we move through 2H, there is likely to be a good entry point to buy Eurozone, to go OW vs the US, but for now we stay on the sidelines given the elevated risk of further drawdowns and no capitulation visible. We keep our Defensive sector tilt, and stylewise, we keep OW Growth vs Value stance, believing that it will continue to build on 14% ytd performance in the US and 7% in Europe.
This podcast was recorded on 24 June 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4728003-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Raphael joins us to provide an overview of the French political developments and their potential impact on the economy. Aditya provides an update of his scenarios for European rates markets and how to position for duration, as we consider whether this situation is idiosyncratic to France or broadening to other Euro sovereign spreads.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Raphael Brun-Aguerre, European Economist
Aditya Chordia, European Rates Strategist
This podcast was recorded on 21 June 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4730678-0, https://www.jpmm.com/research/content/GPS-4730510-0, https://www.jpmm.com/research/content/GPS-4725293-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
In contrast to Q1, when key bond proxy Defensive sectors – Utilities, Real Estate and Staples – were the three worst performers, Q2 has brought a change. QTD, these three sectors are in line in Europe, making a positive swing in performance of 10%. The worst performers so far this quarter are Autos, Travel & Leisure, Chemicals, Luxury and Construction Materials – all Cyclicals. Will this shift last? We believe it will, on further repricing of a range of tail risks, and reiterate our barbell of OW Defensives and Commodities. First, many Cyclical sectors, with some notable exceptions such as Chemicals, Commodities and Logistics, strongly outperformed Defensives last year, when PMIs were falling, so why should they now outperform again? Also, the valuations of Cyclicals, which were cheap at end 2022, have moved to the expensive side of fair value. Second, activity momentum is picking up in manufacturing and in Europe/China, the laggards from last year, but crucially US growth momentum is likely slowing into year-end. As US CESI has turned negative, Defensives could have the upper hand. Finally, bond yields are likely to be flat or move lower into year-end; we reiterate our call from last October that US 10-year yield has likely peaked at 5%. Now, in terms of styles, this should keep helping our OW on Growth vs Value, but should also support bond proxies. Looking at Defensive sectors, Healthcare as an index was up this year in Q1, and in Q2 it worked even ex NOVOB. We think this broadening should continue. Utilities see a pickup in CO2 and in gas prices, in addition to supportive EPS momentum. Staples do not have many fans, but are markedly cheaper currently than in 2022. On the negative side, we remain cautious on Consumer Discretionary – in particular on Autos and on Luxury; we are still UW Chemicals, even as we acknowledge that they already had a terrible 2023, and are again strongly behind ytd, by 1000bp in Europe; and we think that Banks are likely to keep rolling over.
This podcast was recorded on 17 June 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4724125-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
This podcast was recorded on 09 June 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4713514-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Looking ahead to next week’s BoJ monetary policy meeting, Fujita-san joins us to share her views of what to expect including the timing of QT, the rate hiking trajectory, terminal rates, and the inflation outlook. Yamawaki-san explains what’s been driving the move up in JGB yield post NIRP. With regard to the upcoming MPM, we see some upside for yields from here as the market is underpricing rate hikes relative to our view, and demand from Japanese lifers is blunted as they await better yield levels.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Ayako Fujita, Chief Japan Economist
Takafumi Yamawaki, Chief Japan Rates Strategist
This podcast was recorded on 5 June 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4714146-0, https://www.jpmm.com/research/content/GPS-4711466-0, https://www.jpmm.com/research/content/GPS-4714651-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
Last couple of months are showing softening US growth momentum, but at the same time an increasing potential for higher for longer Fed. We see the market upside capped during summer due to the inconsistency between consensus call for disinflation on one hand, and the belief in no landing and in earnings acceleration on the other. Within the market there was a more Defensive rotation underway in Q2, compared to Q1. We think this will continue on likely peaking in bond yields and more attractive valuations. At sector level, we hold a barbell of Defensives and Commodities, and are in particular cautious on Consumer Cyclicals such as Autos and Travel & Leisure. Stylewise, our OW on Growth vs Value continued working – we are not changing it for now, but Small caps could trade better in 2H. They have again lagged ytd, in all key regions, are cheap, and typically perform better when policy cuts start in Europe. In addition, European activity already had a reset last year, and is likely to be better this year. For the US, the rotation might work also, but we do not see it as clear cut, as Fed could stay higher for longer, and US domestic growth could actually weaken meaningfully in 2H. We reverse our long-term preference for FTSE100 vs FTSE250.
This podcast was recorded on 02 June 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4715457-0.pdf for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Eric and Nelson join us to discuss their views on HG and HY. For HG, we review what’s driving the low volatility of credit spreads, whether credit investors becoming more defensive, and what would cause spreads to break out either way. For HY, we highlight our recent forecast revisions, our default rate assumptions, and how recent capital market activity is affecting spreads.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Eric Beinstein, Head of US Credit Strategy
Nelson Jantzen, Head of US High Yield and Leveraged Loan Strategy
This podcast was recorded on 29 May 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4713311-0, https://www.jpmm.com/research/content/GPS-4713437-0.pdf, and https://www.jpmm.com/research/content/GPS-4704000-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
In this report, we focus on two topics: first, at sector level on the Cyclicals vs Defensives performance into rate cuts and against the backdrop of falling bond yields, and at the style level on the performance of Large vs Small caps. Historically, Defensives and bond proxies struggled when bond yields would be moving higher. This phase might be ending. Especially if bond yields are falling as economic growth is moderating, the sector leadership is likely to be more Defensively tilted, as is the case so far in Q2. Additional considerations are: valuations – Cyclicals are generally trading stretched vs Defensives; past performance – the Cyclical run over the last 18 months has opened up a gap with PMIs, which has not closed yet; and finally the weaker recent earnings delivery of Cyclical vs Defensive sectors. We favour a barbell of Defensives and Commodities. With respect to Small vs Large caps style tilts, there is a typical pattern of weakness in Small caps into, and a rebound post, the start of central banks easing. This is visible for both the Eurozone and UK small caps. For the US Small vs Large caps, the weakness into the first Fed cut is seen too, but there was no imminent rebound, more a weaker performance for another six months or so, and only then a recovery. Additional consideration for small caps trade is likely the domestic economic backdrop. Here, European growth had a reset last year, and is looking sequentially better this year, while US was resilient last year, but could soften from here. Small caps have had two poor years everywhere, and are lagging again so far ytd, by 9% in the US, 4% in Eurozone, 2% in UK and 8% in Japan – the turn might be upon us, likely more in Europe than in the US, though, given less visibility over Fed start and softer forward activity momentum in the US.
This podcast was recorded on 27 May 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4117650-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
The Chinese economy will be slowing from Q1 to Q2 as the uplift from LNY and earlier stimulus fades. Additional housing-related stimulus has appeared, raising hopes for the housing problem to settle. Meanwhile, we have been OW Chinese stocks, and we review what keeps us in the trade after the strong rally, and what would change our minds. Finally, we discuss US election risks related to China and how this affects the runway for this trade.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Haibin Zhu, Chief China Economist
Wendy Liu, Chief Asia and China Equity Strategist
This podcast was recorded on 22 May 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4700097-0, https://www.jpmm.com/research/content/GPS-4699107-0, https://www.jpmm.com/research/content/GPS-4704000-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker - Mislav Matejka, CFA, Head of Global Equity Strategy
Q1 reporting season again showed an age-old pattern of beats vs heavily lowered expectations. For full year 2024, earnings projections in the US are unchanged ytd, and down a few percent in Europe. The downgrades to sellside analyst EPS expectations throughout the year are nothing unusual, they happen most of the time, without adverse equity market reaction, but we believe that it is important that they do not escalate, as then the market might not be able to look through them. Beneath the surface, there are three interesting trends, one being maintained, and two showing a rotation: 1. All the US earnings growth is still Mag-7 driven. Q1 was the 5th quarter in a row where, if Mag-7 contribution is taken out, the remaining 493 S&P500 constituents have shown outright negative yoy% EPS growth. This has been beneficial to our continued OW on Growth vs Value style, and OW large vs small caps, but the odds could be increasing that we might see some reversal. 2. European earnings are starting to do better vs the US, and that was one of the reasons why we upgraded Eurozone vs the US last quarter. We continue to believe that the region will at least hold its own vs the US, irrespective of the direction of the overall equity market. 3. Cyclical sector earnings are softening vs Defensives. For S&P500, median Cyclical EPS growth is now below Defensives, for the first time since Covid. This is one of the reasons why we argued in early April for a rotation into Defensives, especially into the Utilities and Real Estate sectors. From a top down perspective, we are particularly concerned about the earnings prospects of the Autos sector, rating it as UW.
This podcast was recorded on 19 May 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4117650-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
After a terrible spell between Jan ’23 and January of this year, where MSCI China lost almost 40%, it is now up 25% from the lows. While we do not believe that the longer term structural concerns of deflationary backdrop, real estate demand-supply imbalances, credit saturation and global decoupling are finished, our tactical view remains that the more positive China trading could last through summer, through July-August, until the US elections heat up in earnest. There is still an EM investor underweight on China, and the valuations probably have another 10-15% upside before closing the discount to historical. A more bullish tactical China stance was one of the drivers of our upgrade of Eurozone equities in Q1. We continue to believe that Eurozone risk-reward has improved, and that the region will at least hold its own vs the US, whether the overall market goes up or down. UK (OW) is also starting to trade better of late, erasing the almost 10% relative weakness seen earlier in the year. At sector level, we think commodities remain interesting as a way to position for more positive China trading, both Mining and Energy. We are less positive on some of other traditional China plays, such as Autos (UW) and Luxury (N). Pricing is a significant risk for both, as well as a potential volume disappointment, leaving their elevated margins at risk. More broadly, at sector level we have been arguing that Defensives should start to trade better, last month Real Estate, Utilities, Staples and Healthcare are top 4 sectors in Europe. Now, more positive tactical China call is clearly a big help for EM group, but we do not believe EM is a buy vs DM. The headwinds for EM remain Fed higher for longer, and stronger USD. EM equities typically struggle to outperform DM when their currencies are under pressure.
This podcast was recorded on 12 May 2024.
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© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
It’s been a tough year for both getting long outright duration or being long steepeners. We expect disinflation will reassert itself, but in the near term, there is event risk (e.g., CPI & HICP numbers) making us cautious. Fabio joins us to discuss the catalysts to trade duration, the curve, and intra-EMU spreads.
Speakers
Thomas Salopek, Global Cross Asset Strategy
Fabio Bassi, Head of International Rates Strategy
This podcast was recorded on May 8, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4691318-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speakers:
Joyce Chang, Chair of Global Research
Jan Loeys, Long-term Strategy
Joe Lupton, Economic and Policy Research
Natasha Kaneva, Global Commodities Research
Steve Dulake, Global Head of Credit, Securitized Products and Public Finance Research
This podcast was recorded on 7 May 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4682573-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
We are concerned about inflation staying too high if there is no slack created in the economy, adverse bonds demand-supply with negative term premia, consensus expectation of profit acceleration of almost 20% between Q1 and Q4 of this year, which doesn’t typically happen, especially if the economy softens in 2H, consumer tailwinds potentially turning, as well as concentration and leadership reversal hurting the market. At the core, the Goldilocks view that market embraced in Q1 of inflation/rates moving lower but at the same time of earnings acceleration and economy having no landing remains an inconsistent one. In fact, the Growth-Inflation tradeoff could end up the opposite, as seen in recent ISM showing a spike in pricing and slowing orders. Together with seasonally poor time for markets coming up and still stretched positioning, we look for more of a consolidation in equity markets over the next months. Within this, we advocate for some of the rotations to come up/have legs. Growth is ahead of Value ytd, small caps are heavily behind again ytd. We fundamentally stay with Growth, Quality and large caps tilts, but the turn could be coming, where small caps tended to perform better as ECB starts to ease. Regionally, we have in Q1 taken profits on US vs Eurozone OW, as well as tactically exited our longstanding China bearish stance. The latest market move to a more Defensive trading should have legs, such as recent outperformance of Utilities and Staples, alongside commodity sectors.
This podcast was recorded on 06 May 2024.
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© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Global Head of Equity Strategy
At the overall market level, we remain concerned about the repeat of last summer’s drawdown, inflation staying too hot is a real possibility, market will not like it if bond yields move above 5%. Within this, we have made some regional changes in Q1, specifically we tactically closed our longstanding China bearish view, given 30%+ drawdown in the past 12 months. Also, we have upgraded Eurozone equities last quarter. To be clear, we don’t expect Eurozone to directionally decouple from the US, but it is interesting that in the recent bout of market weakness, S&P500 was down 5-6%, in contrast to EuroStoxx50 down only 3%. We continue to see an improved relative risk-reward for Eurozone equities: 1. Eurozone is trading at 13x forward P/E, vs S&P500 at 20x. In terms of shareholder returns, buybacks yield in Eurozone has moved closer to the US, while dividend yields are remaining double the US. 2. In what is historically atypical, ECB is set to start cutting ahead of the Fed, and by a greater magnitude. At the same time, PMI momentum is improving in Eurozone vs the US, post last year’s reset. 3. Tactically better China performance will help Eurozone vs the US trade, and also UK (OW) and commodities. 4. We have held preference for Growth over Value, for High vs low Quality and for large vs small cap stocks, and we still believe that fundamentally these are right exposures, but do recognize the potential for reversal is very high. Now, the risk of extreme concentration and the momentum unwind is also present in Europe, but it is on a much bigger scale in the US. In the report we address the market, sectors, styles etc. behavior around the first ECB cut in the cycle, which is likely coming up in June. Notably, small caps begin to perform better post the start of ECB cuts.
This podcast was recorded on 28 April 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4683726-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Ipek Ozil, US Interest Rate Derivatives Strategist
Powell’s recent comments represent a strong reversal from the dovishness from March, so policy uncertainty remains as elevated as ever. In response to strong CPI data this week, the options markets are implying a significant weight on a hike by year-end, leaving rate-cut scenarios with a total weight similar to rate hike scenarios.
This podcast was recorded on 17 April 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4669694-0, and
https://www.jpmm.com/research/content/GPS-4672843-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav, Matejka, CFA, Head of Global Equity Strategy
Q1 reporting season is upon us. As is typical, consensus projections have been moving materially lower over the past months. For S&P500, IBES is now calling for 3% yoy EPS growth, which is down from 10-12% projections seen last summer. In a break from recent norms, though, the activity momentum firmed up during the quarter, as seen in rising global PMIs. These together suggest that we will get earnings beats. The likely earnings beats do not necessarily mean that equities will advance during the reporting season, though. This is because the market has already strongly rerated during Q1, and the big gap has opened up ytd between Fed projections and equity index levels. The risks of interest rates spiking for the “wrong reasons”, Fed pivot getting fully reversed and inflation staying too hot are all elevated. At the same time, geopolitical uncertainty could quickly spike further, and any de-escalation prove fleeting. In addition, consensus expectations are for a very steep climb in earnings over the next few quarters, from Q1 S&P500 projection of 55$ to Q4 forecast of 65$, amounting to an almost 20% increase. This is at a risk of disappointment. In terms of earnings themes, pricing is likely to soften, with topline growth coming back to earth. At sector level, the pickup in commodity prices could help the respective sectors performance. We recently advised for Utilities to perform better, irrespective of bond yields move, and believe that Banks earnings results could end up underwhelming. Regionally, we believe that the period of US earnings outperformance vs Eurozone might be ending. The relative US-Eurozone PMI momentum is likely peaking, which suggests relative EPS delivery might be turning too. These support our recent upgrade of Eurozone equities vs the US.
This podcast was recorded on 14 April 2023.
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© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
A hot CPI print following the recent strong jobs print has put ‘high for long’ back in focus, challenging the soft landing narrative. We discuss with Phoebe what these ‘bumps in the road’ mean our views on TIPS, breakevens, and duration generally. As for Gold, Greg dissects the reasons for the recent rally and reviews whether the rate cutting cycle is going to be as bullish for Gold as it was historically.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Phoebe White, Head of US Inflation Strategy
Greg Shearer, Head of Metals Research
This podcast was recorded on 11 April 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4671684-0, https://www.jpmm.com/research/content/GPS-4667440-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
With respect to bond yields’ direction, our call last October was to go long duration, that bond yields have likely peaked. After the ytd bounceback, we think that yields will resume moving lower. Our FI team forecasts that US and German 10-year yields will be below current on 3-, 6- and 9-month horizons. We fundamentally agree with this, especially given the elevated geopolitical risks at present, but note the risks of inflation staying too hot. The Fed might be wrong to assume that all the recent inflation pickup is transitory; also the term premia are outright negative again – pointing to inflation complacency. If bond yields end up moving higher from here, against our base case view, that might be “for the wrong reasons”, with market weakening in that scenario, like last summer. Now, irrespective of how one sees the bond yields’ direction from here, we think that the Utilities sector’s poor performance has likely gone too far. If yields fall, as is our core view, that should help the sector. In the opposite scenario, the overall market could weaken, and the typical low beta of Utilities could come to the fore. In addition: 1. The client concern is with respect to perceived elevated leverage of the sector, but we think this is misplaced. Leverage is higher than in the past, but cash flow generation is strong and Utilities stocks are solidly investment grade. 2. Utilities have been derated to pre-Ukraine levels, but power prices are still higher than pre-Ukraine. Power prices should not go lower from here, as industrial demand is starting to come back. 3. Earnings relative of Utilities are continuing to move up, making the sector very attractive at present. P/E relative of Utilities is near record cheap. 4. Renewables have been underperforming the rest of the sector for more than three years now, and are increasingly more attractively priced. We also think that Real Estate should be looked at again.
This podcast was recorded on 07 April 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4650376-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
In terms of leadership, US and Japan are ahead of other markets ytd, Growth is outperforming Value and large caps are again beating small, in all key regions. We continue to believe that this style of leadership will broadly stay the case for a while longer, until there is a break, or a reset, in the cycle. For Value, commodities, low Quality, small caps, EM or International stocks to begin leading more sustainably one needs to see a reflationary backdrop, in our view, but we could have the opposite. Within this, we have recently taken profits on US vs Eurozone OW, as the Eurozone risk-reward has improved, in our view. Among other, Eurozone valuations appear very attractive, relative growth momentum could be bottoming out and ECB could start moving ahead of the Fed, which would be very atypical. We also have a tactical buy on China given extreme cheapness and UW positioning by most investors. Broadly, JPM Fixed Income’s call is that bond yields are fundamentally set to move lower in 2H, but we note a pickup in inflation swaps, as well as the outright negative term premia for bonds again, which suggests that there is a lot of complacency in the bond market with respect to the inflation risk. Consequently, the gap that has opened up ytd between Fed futures and the equity market is getting wider. Equities rallied almost 30% from last October lows, driven in Nov-Dec by the expectation of a Fed pivot, but these projections have fully reversed back to October low levels. Equities are ignoring the most recent pivot of a pivot, which might be a mistake. The assumption that the market is likely making here is one of growth acceleration coming to the rescue in 2H. In this regard, we note that earnings projections for 2024 are still not moving up. Regionally, Japan is staying our top pick, continuing our 2023 preference.
This podcast was recorded on 31 March 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4662999-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Using positioning as a guide, investors have been expressing the opinion that Mortgages are cheap relative to Corporates, but the excess returns have gone the other way, with Corporates outperforming by ~1% in terms of excess return YTD. Looking ahead, Corporates can still outperform MBS in a range-bound rate environment with little economic growth risk while high-coupon MBS, with better yields due to negative convexity, can also do well in a stable rate environment.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Nathaniel Rosenbaum, HG Credit Strategist
Nicholas Maciunas, Head of Agency MBS Research
This podcast was recorded on April 1, 2024.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4656379-0 and https://www.jpmm.com/research/content/GPS-4658455-0. For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved.
Thomas Salopek speaks with Rie Nishihara, Head of Japan Equity Strategist, Takafumi Yamawaki, Head of Japan Fixed Income Research, and Ikue Saito, Currency Strategist.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Rie Nishihara, Head of Japan Equity Strategist
Takafumi Yamawaki, Head of Japan Fixed Income Research
Ikue Saito, Currency Strategist
This podcast was recorded on March 25, 2024.
This communication is provided for information purposes only. Institutional clients can view the related reports at:
https://www.jpmm.com/research/content/GPS-4657063-0
https://www.jpmm.com/research/content/GPS-4655242-0
https://www.jpmm.com/research/content/GPS-4655120-0
https://www.jpmm.com/research/content/GPS-4658455-0
For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
The bulk of the equity performance so far this year, and indeed in the past 18 months, was driven by multiple expansion. Globally, 12m forward earnings are up only 7% from the lows, in contrast to nearly 30% P/E upmove. 2024 EPS projections are again down small in the US ytd, and are more meaningfully lower in Europe. At the same time, bond yields are higher, squeezing ERPs. Global earnings yield vs bond yield differential has been moving lower, to be now below 2007 levels. Central banks are set to deliver some cuts in 2H, but in order to justify current equity valuations, we believe that we will need to see at least some earnings acceleration, as well. Ultimately, equity valuations will end up responding to earnings momentum trends, as there is a clear historical correlation between P/E multiples and earnings revisions. IBES is projecting a sequential pickup in earnings growth between 2023 and 2026, but our concern is that profit growth could underwhelm. If the earnings acceleration fails to materialize, this could act as a constraint, in particular for Cyclical sectors, which are currently trading at price and P/E relative highs vs Defensives. Regionally, China equities showed no rerating over the past 18 months, still trading around 9x forward, which is at absolute and relative lows. Eurozone trailing buybacks yield is at present quite close to US. At the same time, Eurozone dividend yield at 3.0% is much higher than US at 1.3%, and bond yields are meaningfully lower – with these three together resulting in a much better total equity yield vs bond yield for Eurozone equities than for the US, of 240bp – we closed US vs Eurozone OW last week.
This podcast was recorded on 25 March 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4651219-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
In this podcast Joyce Chang, Chair of Global Research is joined by Sam Saperstein, Head of Women on The Move across the entire JPMorgan Chase platform to discuss the work J.P. Morgan Chase is doing on expanding women-owned businesses, bridging the funding gap for women founders and how we are promoting women and girls’ financial health.
SpeakersJoyce Chang, Chair of Global Research
Samantha Saperstein, Managing Director and Global Head of Women on the Move, JPMorgan Chase Co
Please see our annual J.P. Morgan Perspectives: Global state of gender balance in 2024: Post-pandemic gains, but far from parity report, where we explore the progress towards achieving gender balance and assess the challenges facing women in 2024.
This was recorded on March 20, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4645664-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
We have cut Eurozone to UW vs the US in early May of 2023, and had a preference for the US since. We are now closing the US over Eurozone OW, for the following reasons: 1. Eurozone has lagged in the past few quarters, losing 14% relative since May, and had relative outflows - in 41 out of the past 52 wks. At 13.3x forward, it is trading cheap vs the US, which is now on 21x. Even if one were to look at sector neutral P/E rating of Eurozone vs the US, it is trading the cheapest vs any time pre COVID. 2. We had a preference for Growth over Value style through 2023 and again this year. Even as we stay with this tilt, we note that Growth style has already performed exceptionally well, it is trading stretched and is at risk of a reversal. Of course, within Europe there is also an increasing risk of MOMO unwind, but the magnitude of the potential impact would always be greater for the US market. 3. In terms of activity momentum, Eurozone had a clear weakening through last year and especially relative to the US. The relative growth disappointments of the region might have peaked, as seen in improving relative CESIs. 4. While ECB typically takes its cue from the Fed, there is a chance that it moves ahead of the US this time around. 5. We have been cautious on China over the past year from a global allocation perspective, but have a tactically more positive China call, and if this continues tracking, it could indirectly help Eurozone. We are neutralizing the US vs Eurozone preference, but not reversing. This is because the potential for a market drawdown is elevated, with Goldilocks fully in the price. The risks are on both sides of this narrow path: either to growth disappointing, as seen in latest weak retail sales and US small business confidence, and also from inflation potentially staying too hot, as seen in the US 1-year inflation swaps approaching October highs. What is attractive in Euro Area? We note that every single Eurozone level 1 sector is trading at a greater than historical discount vs the US.
This podcast was recorded on 17 March 2024.
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© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
A slightly warmish CPI hasn’t moved the needle for us, so we stick with our current view on duration. Despite recently turning neutral on US duration, slowing growth and inflation should produce DM gov’t bond return of ~6.5% assuming our yield targets are realized. Upside risk for growth and inflation may continue to eat in to rate cutting plans. With the Magnificent 7 facing jitters and Equal Weight S&P at highs, we are skeptical of the breadth improvement as megacaps are still leading with the laggards dragged along for the ride. As for PMI dislocations vs risk assets, we acknowledge the improvement on the growth trajectory closing some of the gap, but historically, in the event of a 2 standard deviation gap, stocks have had to make more of the adjustment.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Jason Hunter, Head of Technical Strategy
This podcast was recorded on 12 March 2024.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4642559-0 and https://www.jpmm.com/research/content/GPS-4647814-0. For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
We favoured Growth over Value style through last year, and again so far ytd, arguing that the Nov-Dec Value rally – such as an outperformance of BKX and of small caps seen at the time – was unlikely to last. There is a clear concern over how sustainable the Mag -7 run is, but we note that this group of stocks is not trading increasingly more expensive, at least not in relative terms. In fact, Mag-7 stocks appear cheaper at present vs the rest of the market than they were trading on average in the past five years. Admittedly, in absolute terms, there appears to be an excess, and Mag-7 could see earnings disappointments as well, proving to be more cyclical. More broadly, Growth style is also supported by the continued better earnings delivery vs Value, and this is the reason we keep the Growth style preference. Where valuations are becoming stretched is in Cyclical sector groups, with European Cyclicals trading at more than one standard deviation expensive vs Defensives. Cyclicals in general are at price relative highs vs Defensives, as high as in ’09-’10, when the synchronized global recovery did materialize. Such an acceleration might be the wrong template this time around. The link between Cyclicals/Defensives earnings and indicators such as IFO remains strong, with IFO leading, and it suggests that Cyclicals earnings are set to soften over the next few quarters, in contrast to the consensus calling for an acceleration. In addition, bond yields are set to inflect lower again, we called in March Chartbook last week for a return to the long duration trade, and this could take out some relative support from Cyclicals.
This podcast was recorded on 10 March 2024.
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© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA - Head of Global Equity Strategy
So far ytd, US and Japan are ahead of other markets, Growth is outperforming Value and large caps are again beating small in all key regions. We continue to believe that this, ultimately unhealthy, high concentration and narrow leadership is set to stay for a while longer. To buy Value and International stocks one needs to see a reflationary backdrop, in our view, but we could have the opposite. In terms of bond yields, we argued last October to go long duration, but also in January to look for a tactical bounce back in bond yields, as Fed easing became overdiscounted in markets. We now think that the counter-rally in yields might be running out of steam, and would advocate to go long duration again. The move back higher in Fed futures might be getting done – they roundtripped back to October levels, and activity momentum could soften from here. The question is, why didn’t equities weaken as US 10-year yields backed up 50bp during Jan-Feb? We think that this is because investors assumed that the yield upmove is reflective of economic acceleration, but we note that earnings projections for 2024 are not reacting positively – they keep coming down in most sectors. If the growth acceleration does not come through, this could act as a headwind. Overall, we keep OW Growth vs Value, US vs Europe, and still see Japan as top regional pick – we look for these to continue tracking.
This podcast was recorded on 04 March 2024.
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Speaker: Mislav Matejka, CFA - Head of Global Equity Strategy
Bulls are to a good extent basing their constructive market call on the premise that corporate profits are set to accelerate, supported by the bottoming out in activity indicators that is now in progress. However, the earnings reality might turn out to be the opposite as we move through the year. In aggregate, corporate profit margins are elevated in a historical context, and appear to be peaking out. The historical pattern where profit margins always start to move lower ahead of the next economic downturn is clear. We see three sources of downside to profit margins from here: 1) Many corporates benefitted from the unique feature of this cycle: as interest rates increased 300bp+, the net interest expense came down. That could be explained by companies locking in low cost of financing through extending the duration of their debt, and also through many corporates seeing an improving return on their cash balances. This development is set to normalize. Separately, the basket of stocks with high refinancing needs is losing 20% vs SXXP over a year ago - JPDEHFCL, and our basket of cash rich companies is ahead by 14% - JPDEHFCW. We think this outperformance will continue through 1H. 2) Topline was exceptionally strong post COVID for many corporates, and pricing power was high. As nominal GDP growth rates fade, margins could weaken. 3) If the economy slows, partly because the supports that it enjoyed last year do not repeat, such as fiscal stimulus, ULCs could pick up. Profit margin proxy, corporate deflator minus ULCs, could turn into more of a headwind. Putting the above three together, one might end up with a disappointing profits outcome even without seeing an outright recession, and we note that 2024 EPS projections keep coming down in key regions. It is interesting to note that for S&P500 all the profit growth in the past few quarters was due to Magnificent 7, and this is one of the reasons why we remain OW Growth vs Value. Ex these stocks, EPS growth for the remaining S&P500 constituents is outright negative.
This podcast was recorded on 26 February 2024.
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© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Yields have move up sharply since the mid-January trough on the back of strong growth and inflation data, although we feel the market may have gone too far, providing an entry point to get long duration, especially now that positioning has neutralized. Jay and Jason join today to discuss the fundamental and technical picture for US Fixed Income.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Jay Barry, Co-Head of US Rates Strategy
Jason Hunter, Head of Technical Strategy
This podcast was recorded on 22 February 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4625977-0, https://www.jpmm.com/research/content/GPS-4630257-0, https://www.jpmm.com/research/content/GPS-4624689-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
One of the sector calls where we face the most pushback from investors is our UW on Banks, entered in Q4. Until Q4, Banks had outperformed for three years in a row, driven by better EPS momentum and ultimately by rising bond yields. We have downgraded the sector as we think this phase is over. US 10-year moved from 0.5% in 2020 to 5% last October, the point at which we argued that bond yields have likely peaked. This is even as we tactically think that short-term bond yields are likely to consolidate, and be somewhat higher. Central banks will be cutting rates this year, which will directly reduce the earnings power of the sector. Second, the pressure could arise from the peaking out in relative EPS growth of the sector. The stalling in Banks’ relative EPS momentum could be enough for the sector to stop working. We note that the EPS revisions of European Banks have just recently entered negative territory. In addition, the net interest income for Banks could weaken, from elevated levels, and deposit betas could increase. Banks meaningfully increased capital return to shareholders, but this could be as good as it gets. Finally, Banks are still a high-beta play on economic momentum and on credit spreads, where the current, rather optimistic, outlook that is priced in the markets might not last. Notably, the commercial real estate remains an overhang for the sector. Regionally, our top pick is Japan, and we still like Japanese Banks vs US and European ones, a call started last April. The Japanese rates cycle remains disconnected from the US and Europe, and it could be moving in the opposite direction this year. Big picture, we keep our view of OW Growth vs Value and preference for US vs International, in effect fading the Nov-Dec market broadening rally. So far ytd, US, Growth and large caps are strongly outperforming International, Value and small caps, in all regions, and our UW on Banks fits this dynamic.
This podcast was recorded on 18 February 2024.
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© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA - Head of Global Equity Strategy
From a global equity perspective, we had upgraded Japan to OW in Dec ’22. While we still think that USD is likely to be stronger from here, it might not be crucial to hedge JPY anymore, as the interest rate differential between the US and Japan looks set to start converging this year. For the continued bullish view on Japan, we reiterate: First, TSE reform is set to lead to improved corporate profitability and greater shareholder returns, given that more than half of Japanese stocks are still trading net cash, and 40% are trading below tangible book. Second, even though it feels as though Japan is a consensus overweight, we think that flows are still at an early stage. Foreigners bought 5trn Yen of Japanese stocks in 2023, which compares to 35trn Yen during the Koizumi era and 25trn Yen during Abenomics, the last two times when Japanese stocks moved up more than 100%. Third, there is a case to be made for some reflation in Japan, through house price appreciation and positive wage growth for Japanese consumers, and lastly, Japan is the only large DM market with dividend yield above bond yield, vs historical. In a European context, after outperforming strongly in 2022, the only large DM market up in that year, the UK lagged significantly in 2023. This has left UK at record cheap, even ex US. UK has the highest dividend yield out of all markets, at 4.3% yield, vs 2.0% for MSCI World. With the central bank cutting cycle about to commence, dividend strategies might come into the spotlight. The UK is a commodity-heavy market, and both Materials and Energy lagged last year, dragging the index down. If commodities find a floor, especially as the FCF yields of both Mining and Energy are very high at present, this could help. China outlook could play a role, too. We held a cautious fundamental view on the China market for a while, but recognize that it is heavily underowned and cheap post the big selloff: MSCI China lost 30% in a year. If China sees short squeezes, that could indirectly benefit the UK.
This podcast was recorded on 12 February 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4622327-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA
So far this year, US is ahead of International, Growth is outperforming Value, large caps are again beating small - Russell2000 is outright down on the year 3%, and China continued struggling. We believe that this, ultimately unhealthy, high concentration and narrow leadership is set to continue until something breaks. To buy Value, beta and International stocks, one needs to see a reflationary backdrop, in our view, but we could have the exact opposite. The risk is of a disappointment on both sides of the Goldilocks narrative. Fed cuts might still be overdiscounted, despite the recent hawkish repricing, and the chances are that inflation picks up again, supply side driven, rather than due to stronger activity, freight rates have nearly tripled. We believe our long duration call made in October will have legs in 2024, but have argued at the start of this year that yields will likely consolidate near term, and the USD could be bottoming out. Regionally, we have preferred US to International stocks since May of last year, and don’t see that changing yet. We remain cautious on China, keep fading the bounces, and keep OW Japan – it remains our top regional pick. We are OW Growth vs Value, continuing our call from 2023, and reiterate our downgrade of Banks to UW in Q4 of last year, after three years of Banks beating the market.
This podcast was recorded on 04 February 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4619832-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2023 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Jason Hunter discusses the short-term technical setups or US Treasuries and equities following the Jan FOMC meeting. He also highlights the key resistance on Shanghai Composite, after the failed bounce leaves that market in a bear trend and vulnerable to further downside.
Speakers:
Jason Hunter, Head of Technical Strategy
This podcast was recorded on 1 February 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4612852-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
We’ve seen a three-month period of underperformance for Chinese stocks and outperformance for Japanese stocks. Our positioning indicators based on futures and cross-border flows hint at flows from China to Japan. The recent China stimulus points to better days ahead for Chinese equities, and the worry was money flowing back from Japan would blunt the Japanese equity rally. Overall, we downplay the idea that a recovery for Chinese stocks must come at Japan’s expense.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Wendy Liu, Chief Asia and China Equity Strategist
Rie Nishihara, Chief Japan Equity Strategist
This podcast was recorded on Jan. 30, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4613215-0, https://www.jpmm.com/research/content/GPS-4609156-0, and https://www.jpmm.com/research/content/GPS-4614086-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA - Head of Global Equity Strategy
The last positive spell for Eurozone was between Sept ’22 and May ’23, when it outperformed S&P500 by as much as 32%, in USD terms. We cut Eurozone to UW in early May of last year, and the question is what can help Eurozone to deliver another leg of outperformance. It certainly screens cheap vs the US, at a 15% greater discount than typical on a sector-neutral P/E metric, and is likely underowned, as seen in 40 weeks of outflows over the last year. A more constructive China backdrop would definitely be a help for Eurozone to take the lead. As MSCI China is down as much as 30% vs a year ago and is likely a fully consensus UW everywhere, the current short squeeze could continue for a bit longer. Having said that, from a fundamental standpoint, we remain bearish on the region, for now. Another factor is the style leadership. We stay OW Growth vs Value, a position we held through 2023. As long as the market stays narrow, Tech driven, the US is likely to have the upper hand vs Eurozone. We note that EPS revisions in Europe remain worse than in the US. Finally, USD direction matters. The Q4 USD downmove might be finishing as the Fed cuts might have been overdiscounted in the near term. If USD is bottoming out, it would be hard for Eurozone to work. Backtested, Eurozone was actually the worst-performing region in times of USD strength, and Japan was the best international market – Japan remains our key regional OW for 2024. What to buy/sell in Europe? From the negative side, we highlight: we are still UW Chemicals and UW Autos, as of Q4 UW Hotels and Airlines, and have in November turned bearish on Banks. On the buy side, we have OW Utilities, upgraded Healthcare in November. We double upgraded Real Estate to OW last October, and finally, we are still bullish Aerospace & Defense.
This podcast was recorded on 29 January 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4609199-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Pedro Martins, Chief EM Equity strategist
David Aserkoff, Head of CEEMEA Equity Strategy
This podcast was recorded on January 25, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4609169-0, https://www.jpmm.com/research/content/GPS-4602980-0,
https://www.jpmm.com/research/content/GPS-4605609-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
HG bond spreads at 110bp are just 2bp wide to the post-GFC tightest level, so Eric joins to shed some light on why spreads are so tight. While our views haven’t materially changed, the market moves have put us well though our YE spread forecast of 125bp, so we consider which catalysts can trigger widening. A disappointing earnings season may prove to be the near-term test for HG, which we see as priced to perfection.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Eric Beinstein, Head of US Credit Strategy
This podcast was recorded on January 22, 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4602424-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA - Head of Global Equity Strategy
For Q4 results, the activity momentum has generally decelerated in the quarter, which calls for a sequential weakness in earnings delivery. The good news is that the hurdle rate has come down aggressively, for S&P500 from 10% to only 2% yoy. Given this, the actual results are likely to yet again beat the much lowered estimates. The problem is that the market really needs some net earnings upgrades to advance from current levels, not just the beats vs heavily lowered projections, in our view. This is because the sentiment and positioning is stretched, valuation multiples have rerated, and the key driver of the Q4 rally, the move lower in bond yields, is likely over for the time being. Big picture, 2024 EPS projections keep coming down, in most regions. This is unlikely to change, we see risks to both pricing and to volumes for this year, in addition to what is generally a tough hurdle rate for most corporates - profit margins are elevated vs typical. At subsector level, Semis, Autos and Banks margins are at record highs, and could weaken. Chemicals margins are subdued, but we fear they could stay weak - we keep our long held UW view on the Chemicals sector. In aggregate, COVID distortions appear to have benefited Cyclicals more than the Defensives, and this is where the unwind could happen. We stay OW Growth vs Value, continuing last year’s style preference, keep OW US vs Eurozone, and believe that Defensives are set to perform better this year.
This podcast was recorded on 21 January 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4604423-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2023 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
The question is whether the move lower in bond yields is over for the time being, and can it resume further down the line without a clear bout of activity weakness materializing? We called last October to position for the rollover in bond yields, but post the sharp fall of 100bp in 3 months, a pause is likely. Central banks rate projections have already moved substantially, now pricing in a cumulative 150-170bp of cuts by the Fed and ECB over the next 12 months, and markets digested a raft of benign inflation prints. Big picture, we believe that the long duration call will stay relevant for 2024, but the near-term stabilization could happen due to the exhaustion in negative convexity impact, on potentially more longer-dated government bond issuance, and along with likely some more mixed inflation prints ahead. We are unlikely to see another leg lower in bond yields near term unless or until there is a clear deterioration in activity dataflow. Now, what could be the implications of this for equity markets? In November and December equities took the fall in bond yields as an overwhelming positive, fueling a risk-on market rebound. Cyclicals outperformed Defensives, with the exception of Real Estate and Utilities; however, the typical defensive bond proxies significantly lagged. If yields stall near term, this likely stalls the rally too, and crucially we do not expect that the decidedly one-sided interpretation of why bond yields have fallen will continue. This is especially if we do see some weakening in consumer dataflow, which was solid to date – most recently US ISM services employment component fell sharply. If the consumer setup changes, then Defensive names could have a catchup, especially as their valuations vs Cyclicals are now attractive, and as Cyclicals have moved further away from activity dataflow. We note that Healthcare, Telecoms and Staples have started the year on a stronger note in both the US and in Europe, and we expect this to continue.
This podcast was recorded on 14 January 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4600086-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Jason Hunter discusses some of the more interesting technical setups and signals from his recent publications and ahead of tomorrow’s CPI report.
This podcast was recorded on 10 January 2024.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4588098-0, https://www.jpmm.com/research/content/GPS-4596708-0, https://www.jpmm.com/research/content/GPS-4594796-0, https://www.jpmm.com/research/content/GPS-4596573-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
As of end October ‘23, the average stock in S&P500 was down on the year, with SPW at -5%. A lot has changed, courtesy of the November-December rally, and equity markets are now showing overbought conditions, with sentiment moving into complacent territory. This can be seen in high RSIs, elevated Bull-Bear, VIX near lows, tight credit spreads, as well as in the current S&P500 P/E at 20x. Importantly, while a year ago risky assets were fully pricing in a recession, and economists unanimously agreed with that, now the picture is quite different, recession probabilities are currently near the lows of the range, and most macro forecasts are hopeful. This might be too optimistic. Our key call was to go long duration, we advised last October to position for the rollover in bond yields, and while we see this call having legs in 2024, there is likely to be some payback given the sharpness of the move over the past 3 months. Yields could be consolidating near term, and have next leg lower only when activity dataflow shows more clear deterioration. Crucially, while market interpreted falling bond yields since Oct as solely a positive development, we do not think that this will sustain through the year. Lower yields could end up signaling weaker EPS delivery ahead, on softening pricing, sequential activity slowdown and profit margin compression. Bottom line, the risky assets have started to fully embrace the macro combination of central banks easing on lower inflation, but at the same time resilient growth and continued record profitability – this might end up contradictory. All this suggests a much less attractive risk-reward than what would at face value lower bond yields/central banks easing and up to now resilient growth suggest. Healthcare, Telcos, Energy and Utilities have started the year on a positive note, and we think this may continue.
This podcast was recorded on 08 January 2024.
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© 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speakers:
Thomas Salopek, Head of Cross Asset Strategy
Marko Kolanovic, Chief Global Markets Strategist
And other speakers from across Global Research
Listen to analysts from across Global Research as they discuss the 2024 outlook across asset classes and regions.
This podcast was recorded on Dec. 11, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4573441-0.pdf for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
The global housing market is facing a supply/demand imbalance with divergent prospects across regions, but the housing affordability crisis is a common denominator. In this video and podcast, we discuss current market conditions in the global housing market. Oversupply in China and commercial real estate contrasts with the lack of supply in the US housing market, which is essentially frozen. US housing affordability is at its worst in 41 years, while Japan, Italy and Spain are the only G20 developed market countries with ratios of home prices-to-income below their historical averages. China and the UK stand out as facing the greatest challenges. In China, housing faces the risk of a double-dip, and financial risks from the property sector remain high despite modest policy support. The UK housing market is most vulnerable due to shorter-term mortgage structure and resets.
Speakers
Joyce Chang, Chair of Global Research
John Sim, Head of Securitized Products Research
Michael Rehaut, Head of Homebuilders and Building Products Equity Research
Abigail Suarez, Head of Neighborhood Development at JPMorgan Chase
Haibin Zhu, Chief China Economist
Meghan Kelleher, International Securitization Research
Chong Sin, US Commercial Mortgage-Backed Securities Research
This podcast was recorded on November 28, 2023.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
We look at 3 key drivers for next year: first, falling bond yields. We called in October to position for a long duration trade, on the back of likely finished Fed, continued deceleration in inflation, activity softening, and post a big bond selloff. As the move lower in bond yields gains traction, it is initially seen as a positive for equities, but that supportive effect might not hold for too long. Second, sequential activity slowdown vs this year. Our economists are projecting 2024 real GDP growth in almost all key regions at a slower run rate than what transpired this year. Importantly, for 3 quarters in a row next year US real GDP growth is forecast to be between 0-1%. This stall speed is not leaving any margin for error, and it is consistent with underwhelming earnings delivery. While recession is not our base case, it doesn’t take much to tip the activity into contraction at such a low starting point. Crucially, unlike a year ago, when almost all economists and the market pricing had recession as a base case, both are in a soft landing camp now - perhaps one should be contrarian yet again. Third, while consensus is looking for earnings pickup in 2024, weaker pricing might lead to disappointments. At sector level, we look for bond proxies such as Real Estate and Utilities to outperform, and have recently cut European Banks to UW. We also find consumer and corporate cyclicals stretched, post a strong run, and have cut a number to UW. Regionally, we continue to find Japan as attractive. Lastly, despite typically favourable seasonals in December/January, current technicals look far from attractive, with SPX RSI in outright overbought territory.
This podcast was recorded on 03 December 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4575554-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2023 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
Our key building blocks for 2024 are: first, to enter a long duration trade, as per our last month’s report. After 3 years of an uptrend, with US & German long yields up 400bp, bond yields look set to move lower. That was the case each of the last 8 times post final Fed hike. Second, all key regions are expected by our economists to see weaker GDP growth in ‘24 than this year. US quarterly real GDP prints are projected to decelerate to stall speed for most of 2024, at 0-1% run rate, not leaving much room for error. Finally, we believe that the consensus call that corporate topline and margins are set to re-accelerate next year will be challenged, on weakening pricing and volumes. We look for flat European EPS growth in 2024, based on no recession materializing. If economies enter contraction, then earnings will naturally fall outright. In the 1H of next year, equities will likely need to negotiate earnings adjustment, as activity slows. We believe that the risk-reward for equities will start fundamentally improving once the Fed is advanced with interest rate cuts, especially if that is happening without clear consumer and labour deterioration. Until then, the chances of an accident, or a more pronounced economic slowdown, are likely to be elevated. Given this, we think the backdrop for risky assets is set to be challenging in the 1H of 2024, with spells of material weakness, and could potentially improve thereafter. Our MSCI Eurozone target for Dec ‘23 was 256, with last week’s spot just 1% away from it. For full 2024, we keep the same target. Regionally, Japan stays our OW, initiated last December, and one might not need to keep hedging the FX anymore. We have been cautious on EM vs DM in 2023, with EM seeing 10% relative weakness ytd. We think that potentially in 2H of next year EM could have a more realistic chance to outperform, as Fed starts easing. We stay UW Eurozone vs the US, for now, a call we initiated in early May, but given the increasingly attractive valuations, where SX5E trades sub 12x forward P/E, we would consider potentially changing this call as we move through 1H of 2024. At sector level, we advise a positive view on long duration/bond proxies, such as Utilities & Healthcare, and recently upgraded Real Estate. On the other side, we are UW Banks, Autos, Consumer Cyclicals, and downgrade Food Retail, Hotels & Travel and Semis to UW, post the strong run. Stylewise, we are long Quality, stay cautious on small vs large caps, but note the valuations are starting to look more interesting.
This podcast was recorded on 28 November 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4572623-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.
© 2023 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
We discuss the message from overnight trading signals and how the impact is manifested in specific timeframes. Professor Whelan from CUHK joins to discuss his own work in this area, while Erik from Research & Jagadish from QIS offer our take on this subject as well as covering the feasibility of implementing these strategies successfully after costs.
This podcast was recorded on November 27, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4444582-0 and https://www.jpmm.com/research/content/GPS-4557365-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
Earnings growth this year is on track for a largely flattish outcome. For next year, consensus is implying a significant pickup, at 10% EPS growth globally. Both topline and margins are expected to improve vs this year. There are risks to this, in our view, especially given that the corporate earnings are at present above historical trends, and that the starting point of profit margins is elevated. The consensus view goes against the reducing pricing power that corporates are starting to face - as PPIs have entered negative territory, there is downside risk to earnings, not upside. The headwind to margins could come from higher cost of goods sold through lagging wage increases, as well as higher cost of financing, while on the other side sales mix and volumes could deteriorate. Put together, next year corporate EPS growth could end up more flattish, rather than up, and this is without having recession as a base case. At the sector level, into next year we see downside earnings risks to Banks, Autos and Consumer Discretionary more broadly. On the other side, we believe Utilities earnings trends are likely to be very resilient, and Energy and Mining could be supported by better spot commodity prices. What do the potential EPS downgrades mean for the overall market? We believe that bond yields are set to move lower, as per our call from last month to go long duration, and we thought the knee-jerk equity reaction to peaking bond yields is a positive one, but also that this is unlikely to last. The historical correlation between bond yields and P/Es has not been consistent; it was sometimes inverse, as in the past five years, but quite often outright positive - on many occasions P/Es tended to fall, not rise, as bond yields went down. It is the EPS revisions which always displayed a consistent, and positive, correlation to P/E multiples. Over the past year, equities were resilient as EPS momentum improved. If EPS revisions roll over again, as the above drivers suggest, then P/E multiples could roll too.
This podcast was recorded on 20 November 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4565785-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
We have moved OW EM FX as US yields fell, data stabilized and EM central banks have struck a more cautious tone. At the same time, we remain MW in EM Local Rates and EM Credit. While EM bond yields have also sold off, any retracement is likely to be incomplete and contingent on a renewed dovish pivot by central banks that are clearly cautious for the time being. Instead, we find EM rates attractive selectively rather than generally.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Saad Siddiqui, EM Strategist
This podcast was recorded on Nov.13, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4552508-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
After a prolonged spell of weakness, at first driven by the inflation and bond yields spike last year, and then this year by macro recovery trade, certain Defensives are starting to trade a bit better of late. We think that Defensives could catch a more sustained bid if: 1. Bond yields could be in the process of peaking out, we reiterate the call from last month that one should go long duration. If the turn lower in bond yields is confirmed, on the Fed being done, a continued move down in inflation, but also on softer activity indicators, as seen in disappointing PMIs, then a range of Defensives should benefit. There is a clear link between bond yields and Utilities. Long bonds have lost half of their value over the past 3 years, as did Utilities relative, and that could be turning. Now, even if bond yields ramp up further, the trade might be on. Any break in yields above 5% will, in our view, be taken negatively by the market. In that scenario, Defensives might not behave as they did in August-September, when they underperformed against the backdrop of rising yields, but could be seen more as a traditional low beta part of the falling overall market. 2. Global output PMIs have been weakening for 5 months now, both manufacturing as well as services, and the risk is of a move into outright contraction. Money supply trends suggest that there could be more downside. 3. Earnings of Cyclical sectors are elevated vs Defensives, and are showing signs of a turn. In the latest reporting season, Cyclicals - Discretionary & Industrials had the most profit warnings, and Utilities the least. 4. Valuations of Defensives are not demanding anymore, having de-rated from outright expensive territory to fair value currently. Within Defensives, we have a preference for Utilities (OW), Telecoms (OW) and Staples (OW), and have recently upgraded Healthcare and Real Estate post the big spell of weakness.
This podcast was recorded on 12 November 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4560156-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Mislav, Kian, and Esmail join to discuss our view of European banks, after our recent shift to UW given that the outperformance of the sector may stall assuming bond yields are peaking. We also discuss the bottoms up perspective and how best to implement the views within vol markets.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Mislav Matejka, Head of Global & European Equity Strategy
Kian Abouhossein, European Banks Analyst
Esmail Afsah, European Derivatives Strategist
This podcast was recorded on Nov. 9, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4546791-0, https://www.jpmm.com/research/content/GPS-4488904-0, and https://www.jpmm.com/research/content/GPS-4555229-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
We reiterate our call from October that bond yields are likely in the process of peaking during Q4, and that one should go long duration. As this view gets confirmation, it is in the short term interpreted by investors as a knee-jerk positive for equities, especially after some derisking that took place in the past months. Having said that, we believe that equities will soon revert back to an unattractive risk-reward into year end. This is especially if 2024 earnings projections start to reset lower. We think that pricing power is waning, profit margins are at risk and the slowdown in topline growth is set to continue. Money supply in the US and Europe keeps contracting. Labour markets are lagging indicators, and could weaken abruptly – continued ytd strength doesn’t mean anything for the next 6-12 months. Within this, we have recently advised to tactically close the shorts on China, given fresh stimulus and an already weak ytd performance – this was behind our call to close the shorts on Miners. If bond yields are rolling over, as we suspect, Defensives will get a tailwind, such as Utilities and Staples. We also reiterate our upgrade of Real Estate, done in September, after 2 years of an UW stance. Finally, we have last week cut European Banks to UW. They had a very strong run again ytd, and will likely have a headwind if yields start moving lower.
This podcast was recorded on 05 November 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at http://www.jpmm.com/research/content/GPS-4553659-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
We expect GLP-1s will be an important theme now and in the years to come, so we’ve gathered up both the Stock and Credit analysts for a number of sectors including Pharmaceuticals, Med Tech, Food, Beverages, Healthcare, Insurance, Retail etc. to get an overview of the broad impact.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Chris Schott, Pharmaceuticals Analyst
Robbie Marcus, Medical Supplies & Devices Analyst
Andrea Teixeira, Beverage, Household & Personal Care Products Analyst
Ken Goldman, Food Producers & Retailers Analyst
Brett Gibson, US Credit Analyst: Healthcare and Insurance
Carla Casella, US Credit Analyst: Food, Beverages, Tobacco, Consumer products, Retail
This podcast was recorded on Nov 01, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4537812-0, https://www.jpmm.com/research/content/GPS-4532586-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
We are advising to open a short in European Banks, and we move the sector from Neutral to UW. Banks have been one of the best performers in the past 6 months, second only to Energy, are ahead nicely ytd, up 8% vs SXXP at 1%, to be cumulatively ahead by 60% since Sept 2020. If bond yields are in the process of peaking this quarter, as we suspect, then Banks could start to struggle. After all, the Banks rally was underpinned by the sharp move up in bond yields over the past 3 years, with German 10 year moving from -0.5% to 3%, and US 10 year from 1% to 5%. Any potential fall in yields, or the ECB cuts next year, will reduce Banks’ profitability. Further, Banks’ deposit base is likely to fall, and with rising deposit betas their net interest income is likely peaking now. From the regulatory side, the sector might not enjoy as favourable a backdrop as it did recently, with buybacks and capital return to shareholders as good as they get. Finally, Banks remain much more levered than any other sector, and are a beta play on the overall activity. Banks could suffer if economies enter contraction, and if some of the very benign credit backdrop changes next year, with spreads widening and delinquencies rising. We are using the funds to upgrade Healthcare, from Neutral to OW. The sector has lagged this year, but could benefit from high USD exposure, low beta and the long duration angle. If Banks start to lag, then the periphery could fall behind core markets. Periphery nicely outperformed the core for a while, Italy is top European performer ytd, up 15%, but Banks relative and peripheral markets relative performances remain very strongly correlated. We remain bearish on the market direction, and our sector positioning stays the barbell of commodities – led by Energy, and the bond proxies – such as Utilities and Staples, which are catching up post the earlier poor performance. This is likely to continue if the long duration trade takes hold, and if the earnings momentum for the overall market deteriorates.
This podcast was recorded on 29 October 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at http://www.jpmm.com/research/content/GPS-4546791-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
“Mortgages are cheap to Corporates” has become one of the most popular adages in the HG credit market this year, achieving near Taylor Swift status within certain circles of investors (aka the Taylor rule). In this podcast, we roll out a novel framework to look at Corporates versus MBS relative value. If we compare the OAS of MBS (which takes call risk into account) versus Corporate spreads adjusted for downgrade risk, then are Corporates cheap to MBS?
Speakers:
Stephen Dulake, Global Head of Credit, Securitized Products and Public Finance Research
Nathaniel Rosenbaum, Head of U.S. High Grade Strategy
Nick Maciunas, Head of U.S. Agency MBS Research
This podcast was recorded on 27 Oct 2023
This communication is provided for information purposes only. Institutional clients visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Eric Beinstein, Head of US Credit Strategy
This podcast was recorded on 26 October 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4538830-0, www.jpmm.com/research/content/GPS-4540030-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
‘Practitioners’ views on QIS investments’ with Dobromir Tzotchev, Head of Cross Asset Systematic Research, Deepak Maharaj, QIS Product Development, and Paul Fraynt, Portfolio Manager, Franklin Templeton.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Dobromir Tzotchev, Head of Cross Asset Systematic Research
Deepak Maharaj, QIS Product Development
Paul Fraynt, Portfolio Manager, Franklin Templeton
This podcast was recorded on October 24, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-3295004-0 https://www.jpmm.com/research/content/GPS-4527762-0 and https://www.jpmm.com/research/content/GPS-4540030-0 For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
In addition to the move up in energy prices and elevated bond yields, renewed USD strength is another factor that the equity market needs to digest. Last October, USD peak coincided with the equity trough, and the more mixed equity performance in the past few months is coinciding with USD bottoming. Almost always in the past, when USD is strengthening, global equities have been under pressure. Our FX team is bullish on the USD over the next 3-6 months, vs all major crosses. If that comes to pass, equities in general could stay under pressure. Regionally, a stronger USD has typically meant the outperformance of Japan, Switzerland and the UK, in local currency, given their large export exposures. When assessing the performances in common currency, US equities are the top performers in times of USD strength, even with a headwind to the exporters, and Japan stays the outperformer, in the regional context. EM is an underperformer, and it is Eurozone that moves to the bottom of the pecking order. EM are lagging DM this year by 10%+, and from our equity strategy perspective, we remain cautious on EM. Broadly, in terms of sector tilts, we continue advising a barbell of commodities – OW Energy – together with a low beta exposure, such as Staples and Utilities, and that could track even if bond yields keep going higher in the near term. European Healthcare could be interesting, as well, as it tended to work well with a strong USD. Thematically, we maintain our longstanding preference for FTSE100 over FTSE250 that we initiated in November ’21. In terms of equity market levels, our index target of 4150 for SX5E has not changed over the last 12 months, since it was initiated. Stocks are at present below it, but we expect continued undershooting of the targets in the near term.
This podcast was recorded on 22 October 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4540044-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Nuclear is making a global comeback, and we see accelerating developments across the APAC region as nuclear plays role in de-carbonization. Since early 2022, at least 14 countries have approved new nuclear units or announced supportive policies. This echoes IEA’s earlier forecast that nuclear power capacity will need to double in size in the next two decades for the world to meet net-zero. We expect this trend to be particularly pronounced in Asia.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Alan Hon, Head of Asia Power, Utilities and Renewables Research
Tomohiko Sano, Co-Head of Japan Equity Research and Head of Japan ESG & Sustainability and Machinery Research
SM Kim, Korean Autos Analyst
Sanjay Mookim, Head of India Research and India Equity Strategist
Hannah Lee, Head of Asia ESG Equity Research
This podcast was recorded on 20 October 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4527125-0, www.jpmm.com/research/content/GPS-4531807-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Jake Pollack, J.P. Morgan’s Global Head of Credit Financing
Stephen Dulake, J.P. Morgan’s Global Head of Credit, Securitized Products and Public Finance Research
This podcast was recorded on 19 October 2023.
This communication is provided for information purposes only. Institutional clients visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Faced with a backdrop of high for long rates, geopolitical risk, and inflection points at the end of the hiking cycle and possible recession, we discuss what are the most promising risk premia and themes on a cross asset basis, from the perspective of Research, Structuring and Macrosynergy. In addition, we discuss the challenges in systematic strategies, given big swings in the data post-COVID and sizable revisions.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Dobromir Tzotchev, Head of Cross Asset Systematic Research
Fred Giertz, Cross Asset Structuring
Ralph Sueppel, Managing Director of MacroSynergy
This podcast was recorded on October 16, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4527762-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker - Mislav Matejka, CFA, Head of Global Equity Strategy
Big picture, we argued last Monday that bond yields are likely peaking. Given that the sharp bond selloff was a problem for equities over the past months, any turn lower in yields is initially interpreted as a positive by the market. The question is how long will that supportive effect last for, as the next market phase could be “bad will be seen as bad”, especially if earnings momentum starts to deteriorate. For Q3 reporting season, the consensus expectations are at +4% and +3% yoy EPS growth ex Energy, for US and Eurozone, respectively. These projections appear undemanding at face value, but, in contrast to 1H, when most activity metrics were on an improving trend, the PMI momentum softened during Q3. Weaker volumes, together with softer pricing, at the time of elevated input costs such as wages and rates could lead to margin squeeze. EPS revisions appear to be weakening again in the US and Eurozone, we think this downtrend could continue. At a sector level, we expect better results for commodity sectors – Mining and Energy. We see continued risks to Consumer cyclicals, such as Retail, Luxury, Autos, but also to Chemicals and Semis. With respect to Banks, they are still likely to have good results in Q3, but the next trade is likely to be to go UW Banks, probably after Q3 results for the sector are out of the way. In terms of positioning, we favour the barbell of bond proxies and commodities into year end. The likely rollover in bond yields, along with the potentially more challenging earnings results, favour the low beta exposure, sectors such as Utilities, Staples, Healthcare and Real Estate, to catch up after a poor 1H. Regionally, we reiterate our tactical call that China equities, and exposure such as Mining, should be trading better in the short term, post significant weakness earlier in the year, and we keep OW Energy.
This podcast was recorded on 15 October 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4534192-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this podcast we discuss the recently published “Cost of Living Surveys” by our US and EMEA retail analysts. The surveys provide a pulse check on consumer sentiment and spending plans ahead, with responses from 5k consumers across Germany, France, Spain the United Kingdom and the United States. The survey results raise a question on whether consumers are at an inflection point and paint a picture of rising income disparities, deteriorating consumer sentiment alongside lower cash balances, with Black and Hispanic families in the US experiencing a more rapid reversal of cash buffers and savings accumulated during the pandemic.
In addition, the JPMorgan Chase Institute has also taken a closer look at how US households are managing their balances and the level of cash buffers they maintain, analyzing a sample of de-identified data covering 19 million individuals that spans the period from 2008 through early 2023.
SpeakersJoyce Chang, Chair of Global Research
Chris Wheat, President of the JPMorgan Chase Institute
Matthew Boss, Head of Retailing: Department Stores & Specialty Softlines Research
Georgina Johanan, Head of the European General Retail Research
This podcast was recorded on 10 October 2023.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Grace Ng, Senior China Economist
Wendy Liu, Chief Asia and China Equity Strategist
This podcast was recorded on October 11, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4530776-0, www.jpmm.com/research/content/GPS-4528894-0, www.jpmm.com/research/content/GPS-4528708-0, www.jpmm.com/research/content/GPS-4523374-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this latest podcast we revisit the predictions we made at the beginning of the year on the outlook for markets and review how the “The Great Repricing” we discussed earlier this year is playing out. We also take the opportunity to make adjustments to our long-only Strategic Asset Allocation views. The great repricing that we had expected for fixed income has dramatically unfolded this past year and a half, with real yields almost at our longer-term target of 2.5% on 10yr US TIPs. We explore what this means for future return expectations on both bonds and equities.
SpeakersJoyce Chang, Chair of Global Research
Jan Loeys, Long-Term Strategy, Strategic Research
Bruce Kasman, Chief Global Economist
Alex Wise, Strategic Research
Amy Ho, Strategic Research
This podcast was recorded on October 9, 2023.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
In terms of a move in bond yields, we believe that we are currently in a transition phase, rising bond yields at these levels are problematic for investor sentiment and for the economy, and are therefore ultimately not sustainable. Bonds RSI is becoming oversold and at some point soon this should morph into pricing in of a policy mistake, where bond yields are likely to start to move lower. Brent rally does mechanically imply that PPIs, as well as CPIs, could inflect higher again. That said, unlike the 2021-2022 episode, where bond yields and oil were moving up together for some time in order to reflect the economies reopening, and where the consumer at the time was accepting of rising prices, given pent-up demand and a strong post-COVID liquidity position, the recent oil rally was mostly for supply reasons. This could lead to demand destruction, and be deflationary, rather than inflationary. Looking at the past eight Fed tightening cycles, post the final hike, bond yields were down each time, by 100bp on average, irrespective of whether recession or soft landing followed. If bond yields roll over, will it help equity valuations? Not if yields are peaking at a time when earnings, and the broader economy, start to disappoint. In terms of sector leadership, we note that post the last Fed hike, the sector tilts would turn broadly Defensive, on a 6- to 12-month horizon, both in the US and in Europe, with Insurance, Staples and Utilities ahead. Another implication, apart from the likely Defensives rebound, would be to go UW Banks. Banks are well capitalized, show strong earnings trends, and have been the best performer in Europe over the last 6 months, given the higher for longer narrative, but could start to lag if/when bond yields peak out, especially if their NII income rolls, along with the potential credit backdrop worsening.
This podcast was recorded on 08 October 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4529073-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Steve Dulake, Head of Spread Product Research
Bram Kaplan, Head of Americas Derivative Strategy
This podcast was recorded on October 5, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4522939-0, www.jpmm.com/research/content/GPS-4512598-0, www.jpmm.com/research/content/GPS-4517149-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this podcast we discuss the substantial outflows and volatility impacting China’s financial markets since 2022. China’s regulatory policies and debt burden have raised concerns and authorities have announced numerous measures to “activate capital markets” and support policy targets since August. We continue to view risks of global financial market spillovers as muted.
Speakers
Joyce Chang, Chair of Global Research
Haibin Zhu, Chief China Economist
Karl Chan, Head of China Property Developers Research
Katherine Lei, Head of Greater China Bank Research
Soo Chong Lim, Head of Asia Credit Research
This podcast was recorded on Oct. 3, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4506472-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka CFA, Head of Global Equity Strategy
Despite some recent weakness, where SPX RSI turned technically oversold, we believe that the equity risk-reward remains challenging. Divergences between softer activity momentum and the elevated equity prices, as well as market internals, that opened up in the summer, are starting to close, but there is more to go. The PMI rebound that many were hoping for, the call that the weakness in manufacturing will end and join the more resilient services, remains elusive. In addition, real rates upmove is pressuring multiples, and this is even taking out Tech. Finally, Brent and USD rally should be seen as concerning for stocks. Most of Brent upmove is supply driven, and could lead to weaker final demand. Corporates might struggle to pass on rising input costs this time, in contrast to ’21-’22. Historically, strengthening USD was almost always met with risk-off in equities. We do not think that bond yields will be able to keep moving up for too much longer, and will likely ultimately fall, and that is precisely because of the “higher for longer” narrative by the Fed. Q4 could end up a very good time to lock in the long duration trade for the next 12 months. SX5E had gone nowhere for half a year now, and has lagged the US since May, coincident with our downgrade to UW – stay short. Even as we remain bearish on China over the medium term, a lot has happened, MSCI China is down 20% since January, and one should not be tactically pressing the shorts into year end, in our view. We reiterate recent call to close the shorts on Miners, and we stay OW Energy.
This podcast was recorded on 01 October 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at http://www.jpmm.com/research/content/GPS-4524004-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
The theme of High for Long (H4L) is supportive for our current Cross Asset views, where it’s long European duration, UW European stock, or OW USD vs lower yielding currencies with growth risk. More often than not, this theme has reinforced the conviction in our regional views as we assess to what degree H4L is durable in countries with more growth risk.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Fabio Bassi, Head of International Rates Strategy
Prabhav Bhadani, Global Equity Strategist
Patrick Locke, FX Strategist
This podcast was recorded on 09 Sept 2023.
This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4519192-0, https://www.jpmm.com/research/content/GPS-4519132-0, https://www.jpmm.com/research/content/GPS-4515282-0, https://www.jpmm.com/research/content/GPS-4519047-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker - Mislav Matejka, CFA, Head of Global Equity Strategy
As inflation rates are moving lower, taking out last year’s spike, the question is what the impact of this will be on corporate profitability. After all, instead of being hurt from higher input costs, it appears that most companies benefitted over the past two years, due to better mix and stronger pricing. European topline growth was a very high 14% in 2021, and as much as 24% in 2022, compared to historical median of 6%. 2022 EBIT margins for Europe are 330bp above 2019 levels. Defensives such as Healthcare, Staples and Utilities are the only sectors that are lower. There is a risk of reversal, especially if final demand stalls, potentially if PMI softness continues, and as supply chains have normalized. There is a very strong correlation between PPIs and global earnings delivery. Now, the latest oil rally could mechanically lead to stronger PPIs again. Historically though, when Brent moved up due to supply constraints, topline and margins of other sectors would not benefit, there would be demand destruction. Pent-up demand is behind us, as well as the ample post-COVID consumer liquidity, companies might not be in a position to pass on rising input costs as easily any more. In the report, we assess sectoral impacts, together with our analysts. We find a number of sectors to be at risk of a reversal in pricing power, such as Food and General Retail, Autos, Semis, Hotels, Airlines, Luxury/Sporting Goods and Construction Materials. On the other side, Insurance, Staples, Healthcare and Utilities could be less affected. Big picture, we see the Growth-Policy tradeoff as challenging into year-end. This is especially as the market is pricing in a no-landing scenario, with VIX at lows, credit spreads tight, and, until recently, a big rally in Cyclicals, but on the other side, the market expects 80bp of easing in 2H of next year, just ahead of US elections. This is an unlikely combination. We believe that Defensives will be having a bid into year end. We reiterate last week’s closing of two years’ worth of shorts in Real Estate, and advise tactically less negative call on China and on commodities – Mining (N) and Energy (OW), as they did poorly in 1H – CSI to bounce vs SPX and SX5E.
This podcast was recorded on 25 September 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4519132-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Michael Feroli, Chief US Economist
The big news at the FOMC was the upward revision of the ’24 and ’25 dots, although Powell’s message seemed less hawkish. Our views haven’t changed, i.e. we’ve seen peak funds and policy will be on hold until around 3rd quarter of next year. We discuss how Fed will proceed in the event of a government shutdown, as well the signaling power of the yield curve.
This podcast was recorded on Sep. 20, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4513430-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker - Mislav Matejka, CFA, Head of Global Equity Strategy
After the strong 30%+ rally vs the US that started last September, Eurozone equities have lagged notably since May, by 14%. SX5E has not managed to make gains in absolute terms since February. On the positive side, given the poor relative run, Eurozone equities are looking quite cheap at present, and one could argue that the relative growth disappointments are likely closing in on their worst point, vs the US. Having said that, the absolute Growth-Policy tradeoff is still challenging for Eurozone, in our view. Activity has stalled, as we were fearing, and M1 lead indicator points to continued softness. On the other side, while ECB has indicated a pause, it might not be done, as inflation could stay sticky – core CPI still has a 5% handle. Eurozone EPS revisions held up well so far this year, but look set to turn sharply negative, which will take away some of the perceived valuation support. Finally, Euro equities are trading better than the macro outturns would suggest. We reiterate our downgrade to UW, made in May, staying cautious on the region, expecting it to have another leg of underperformance in the global context. This could come if services momentum slows more broadly, and if bond yields move down. Eurozone historically acted as a high beta on the way down vs other equity indices, especially the US. Within Europe, we have tactically a more positive call on commodity equities, Energy (OW), which tended to do well against the backdrop of the rollover in PMIs, as well as Mining, on which we were bearish earlier in the year, but would not be short any more given the big 30% underperformance since January. We are relatively more cautious on consumer and corporate plays, that have done well in 1H, such as Autos, Semis, Capital Goods and Luxury. We also stay cautious on Chemicals. We have been UW Real Estate for the last two years, but advise closing the short now. We are not excited about Eurozone Banks (N), and globally prefer Japanese Banks – we continue the pair trade of long Japanese vs Eurozone Banks – started in April, on the expectation of further move up in Japanese bond yields vs Eurozone bond yields.
This podcast was recorded on 18 September 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4514331-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Eduardo Lecubarri, Head of SMidCap Strategy
We maintain a cautious stance with a deteriorating macro backdrop and margin pressure which challenge the rich consensus sell-side earnings estimates. Despite our bearish view, we can find SMidCap opportunities at the stock level, focusing on names which are under-valued, where pricing power and margins are more supportive.
This podcast was recorded on Sep. 13, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4497659-0, https://www.jpmm.com/research/content/GPS-4508173-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker - Mislav Matejka, CFA, Head of Global Equity Strategy
China is the worst performing equity market ytd, out of larger EMs and DMs, down 6%, and 20% below January highs. At the same time, fresh stimulus newsflow is coming through and the Chinese-related indices could be due a bounce. Should one position for this? The new support measures might stabilize Chinese growth momentum, close to the 5% target, but could end up insufficient in helping drive any sustained upside. We note CNY is making fresh multi-year lows. Structural concerns remain significant, with the lack of confidence by the private sector, and the adjustment in real estate continuing. Demographics is a constraint; fiscal and monetary space to act is limited; and the risk of Japanese-style stagnation remains real, with a housing double dip the base case. We have been cautious on China over the past months, advising to fade stimulus-driven bounces. Our worry is that any rally might end up short-lived, and not lead to sustained medium-term gains, unless the real estate overhang reduces. With respect to the broader EM, EMs are this year underperforming DM by 11%, and even if one is to look at DM ex US, or EM ex China, EMs are struggling this year. While the Fed is likely to stop tightening, it could stay higher for longer. The EM FX index is making fresh lows. If USD keeps getting stronger, as we suspect, this was never a good backdrop for EM. In our global equity regional allocation, we stay cautious on EM vs DM. The EM basket has underperformed European indices ytd, and we stay away from it. Within it, while we are cautious on Miners, we note that they have already performed quite poorly, and, together with Energy which we are OW, can offer better relative value. In contrast, Luxury, Capital Goods, Autos and Semis did well in 1H, but are starting to stall, and there could be further weakness ahead. Defensives to work.
This podcast was recorded on 10 September 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4509399-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Broadening policy easing in China will do just enough to ensure growth comes in at the ~5% growth target, although in the absence of bazooka-like stimulus, restoring private sector confidence will be critical. Tingting, Tiffany and Soo Chong join us to give an update on China economics, rates, FX, and credit.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Tingting Ge, China Economist
Tiffany Wang, Rates and FX Strategist
Soo Chong Lim, Asia Credit Strategist
This podcast was recorded on 08 Sept 2023.
This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4498587-0 , https://www.jpmm.com/research/content/GPS-4506962-0 , and https://www.jpmm.com/research/content/GPS-4504178-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this podcast we discuss the recurrent food security crises, which bring new challenges as supply side shocks, geopolitical risks, climate change and biodiversity loss magnify vulnerabilities across the global food system. Moderate or severe food security now affect 30% of the global population, or 2.4bn people and food insecurity is the “new normal” with climate change and biodiversity loss pointing to recurrent crises.
Three shocks tilt food prices to the upside—the breakdown of the Black Sea Grain Initiative (BSGI), new rice export restrictions and El Niño. Countries are bracing for ongoing food insecurity through increased stockpiling, seeking alternative supply routes and maintaining restrictions on food and fertilizer exports, and a number of countries are also accumulating stocks of food in reserve as buffers. Africa and EMEA are most exposed to wheat and rice shortfalls, while LatAm food supply is most exposed to weather-related shocks on food prices from El Niño.
SpeakersJoyce Chang, Chair of Global Research
Nicolaie Alexandru, Head of EMEA EM Economics Research
Toshi Jain, India Economist
Vinicius Moreira, Brazil Economist
Natasha Kaneva, Head of the Global Commodities Strategy
Virginia Martin Heriz, Head of ESG Research Methodology and Integration
Amy Ho, Strategic Research
This podcast was recorded on September 6, 2023.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker - Mislav Matejka, CFA, Head of Global Equity Strategy
Divergences keep opening up between the resilient equity markets and softening dataflow. Manufacturing PMI recovery, that was the consensus call for months now, remains elusive, and there are signs of services weakening, as well. There is no regional convergence coming through, with Europe disappointing further, and China staying mixed. SX5E had gone nowhere for half a year now, and has lagged the US since May, coincident with our downgrade to UW, but the relative performance of SX5E vs bonds has opened up a big gap with IFO, worth 20%+. How will it close? Also, even as Cyclicals finally stalled somewhat in August, the gap with PMIs remains significant. In a sense, bad is so far still seen as good, but this could change if labour market and consumer dataflow starts disappointing. Bond yields look set to move lower in that scenario, which will keep supporting our OW Growth vs Value call that we had on this year, at least in relative terms, but the bond proxy sectors should be logically getting a bid, too. Cyclicals stalled in August, keep fading them, in particular Industrials and Autos.
This podcast was recorded on 03 September 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4502246-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
Month to date, in SXXP, Healthcare, Energy, Insurance, Staples and Utils are top sectors, a big change from earlier in the year, while the worst are Mining, Autos, Industrials, Travel & Leisure, Semis and Homebuilders. This reversal in leadership coincided with bond yields breaking out higher in August, from 4.0% to 4.30% for US 10 year. Can Defensives work if yields are going up, and should yields be going up in the first place? We think that bond yields’ move is to a good extent driven by inflation forwards moving up, US debt downgrade, and demand-supply worsening, and not just due to forecasters abandoning their recession calls. If the above remain the dominant drivers, then it is unlikely that high-beta stocks will benefit from this; i.e., bond yields might be rising for the “wrong reasons”. MSCI China made new ytd lows last week, down 20%+ from Jan high. This usually mattered for the broader Cyclicals complex, and not just for Miners. Lastly, Eurozone PMIs are meaningfully down since May, coinciding with our downgrade to UW. As we feared, the positive convergence, which was the consensus call over the past 3-4 months by forecasters, is not coming through, PMIs appear to be converging to the downside. Our lead indicators continue to point to no meaningful recovery in the near term. Despite recent Cyclicals stalling, the gap between PMIs and market internals, which we highlighted in our July Chartbook, is still significant. We do not see bond yields moving higher from here, at least not for the right reasons, China is likely staying under pressure, and PMIs are weakening. Put together, we think that Cyclicals can show another leg lower.
This podcast was recorded on 28 August 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4498704-0
for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
Compared to the start of the year, clearly investor expectations, market positioning and the equity valuations have moved up. Recession projections have been erased, there is no more fear, only complacency. While positioning was rather cautious at the turn of the year, many indicators point to significant investor involvement currently. SPX P/E has moved from 17x in January to 19x forward at present. Even ex Tech, multiples have rerated. Relative to this optimism, it is not clear to us that the Growth-Policy tradeoff has materially improved. China continues to disappoint, we believe one should keep fading any stimulus-induced bounces, and Europe has also lost momentum, especially since May, coinciding with our downgrade. On the inflation/policy front, it is likely easier for inflation to move down from say 10% to 5%, but the move from 5% to 2% becomes incrementally harder. Central banks could stay higher for longer, which would limit any prospect for multiple expansion, and the market would then need to solely rely on earnings growth for upside. On earnings, we note that full-year EPS projections are not inflecting meaningfully higher, current PMIs are consistent with continued earnings downgrades. European equity indices have struggled to deliver gains for a while now. SX5E is currently at the same levels it held in February, it didn’t advance for 6 months. Despite this, we do not see any upside from here into year end, and we reiterate our year-end targets that we first unveiled last December, of 4150 for SX5E. This offers only marginal downside from current levels, but we think there is a good chance that equity markets move meaningfully below our year-end projections in the interim. In terms of key positioning, we were OW Growth vs Value this year, but the Tech run is becoming heavy, so we think that pure Defensives look the best into year end, in addition to the Energy sector.
This podcast was recorded on 20 August 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4493429-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Recent developments such as the spectre of property default, worsening exports, and disappointing TSF credit point to further slowing in China, and Chinese stocks must cheapen further before they become interesting again. Ex-China, EM stocks are still cheap and under-owned, with the current P/E discount much wider than the already wide historical discount.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Pedro Martins, Chief EM Equity strategist
This podcast was recorded on date.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4486467-0, www.jpmm.com/research/content/GPS-4486687-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Jay Barry, Co-Head of US Rates Strategy
This podcast was recorded on 07 August 2023
This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4479744-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matjeka, CFA, Head of Global Equity Strategy
Consensus projections for Q2 have been cut significantly over the past months, resulting in the -12% yoy EPS growth expectation for S&P500, and -17% for SXXP. Ex commodities, this improves, and median EPS growth projections are around zero. At the same time, Q2 activity was overall robust, with global PMIs in expansion territory, and consistent with sequential EPS growth. Put together, the unassuming hurdle rate, coupled with activity which held up well during the quarter, is pointing to beats. Having said that, the stock price reactions in general could be more muted than in Q1, or at least any positive momentum might not have legs. Ahead of Q1, sentiment and positioning were cautious, but the equity market was strong coming into Q2 reporting season, suggesting buyside expectations are more elevated, even as analyst projections are subdued. Also, the question is whether the guidances will be raised on the back of quarterly beats, as there was some loss of momentum as we moved through the quarter, and China dataflow continues to disappoint. Out of early reports, with 70 S&P500 results and 90 in Europe, the majority are beating the consensus projections, but the stock price reaction to the beats is worse than typical. For the full year 2023, the S&P500 EPS growth rate currently stands at -1.0%, down from 3.2% in January, and SXXP at ‒0.4%, down from 1.6%. The full year projections are not overly conservative, even with these near zero growth rates assumed, as 2H earnings are expected to bounce 8% vs 1H levels. If in 2H the PMI momentum loses steam further, China activity stays disappointing, and pricing power erodes, all of which we subscribe to, and the lead indicators are pointing to, then EPS growth projections are set to move further down, with EPS revisions bound to spend time largely in negative territory.
This podcast was recorded on 23 July 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4467241-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Tune into our latest podcast on J.P. Morgan Research’s All into Account channel where we discuss why “de-coupling” is neither possible nor desirable but see new trade corridors emerging as supply chains are disrupted, commodity markets reshaped and industrial policy on the rise. We highlight the themes transforming the supply chain, examining the shift in traditional trading patterns and capital flows, and the regional implications. ASEAN and northern Asian countries are benefiting the most from shifts in global value chains, while Latin America is also well-positioned to benefit from friend- and near-shoring with the US and there’s long-term potential and incentives for supply chains to relocate to India. Russia-Ukraine war has permanently reshaped China-Russia trade and global commodities markets with diversification of currencies used to settle commodity trades, though de-dollarization fears are overstated.
Speakers: Joyce Chang, Chair of Global Research Sin Beng Ong, Chief ASEAN Economist Sajjid Chinoy, Chief India Economist Gabriel Lozano, Chief Mexico & Central America Economist Haibin Zhu, Chief China Economist Natasha Kaneva, Head of Global Commodities Strategy Alexander Wise, Strategic Research
This podcast was recorded on July 18, 2023.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
Since the relative high in May to early last week, Eurozone has lost 12% vs the US, in USD terms, and is trying to bounce. We believe there is another leg of underperformance ahead, and reiterate our moving the region to UW two months ago. This was partly given our view that Eurozone activity momentum was about to roll over. Indeed, post the last two months of poor PMIs and other subdued data prints in Eurozone, its CESI is very weak currently, near the typical lows of the range. This could call for some short-term stabilization, but our view is that the Growth-Policy tradeoff in the region is likely to get worse through 2H. The gap between the performance of Eurozone/US equities and Value/Growth style has closed, but the next leg down could be driven by a move lower in bond yields, as well as the earnings disappointments coming up. Earnings and PMIs have a clear link, with downgrades likely at these levels of PMIs. What is at risk in Eurozone? The highest correlation with PMIs is usually seen among Autos and Banks. Banks could still have good numbers in Q2, as NII likely peaks towards the end of the year. We would use any strength on the back of positive results to reduce into. We stay cautious on Chemicals and Mining, despite an already meaningful chunk of underperformance. Capital Goods have been very strong in 1H, but could start to see weakness, as they typically trade with IP momentum. Finally, Semiconductors have near record inventory, many have been outperforming as a play on the AI theme, but the benefit is likely only marginal. The above outcome could be reinforced by any potential further disappointments in China. Now, as MSCI China was already down 20%+ from January highs to the recent low, the stimulus announcements, where the hopes are increasing, could result in bounces, but we advise using these pockets of strength to reduce further. The region is sliding back into deflation and the property market will likely need a much more aggressive policy support to rebound sustainably, given past excesses.
This podcast was recorded on 20 October 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4461310-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
Our AI basket is up 42% relative to S&P500 this year, SPX over SPW dispersion is at a meaningful 10%, and with Tech sector a standout outperformer, up 25% relative, there is a view among many that taking the Tech/AI out of the market, the rest is quite cautious and already pricing in a potential adverse scenario. We don’t subscribe to this view. The market ex Tech/AI is far from priced for disappointment. In terms of 12m forward P/E multiple, S&P500 is currently at 19.4x, Tech at 27.3x and non-Tech/AI part, the remaining 65% of the index, at 17.4x. This compares to 15.3x historical median, a 10%+ premium. At the low last October, when recession was the base case for most, S&P500 was trading at 15.3x forward P/E, with Tech at 18.1x and SPX ex Tech at 14.5x. Importantly, these P/E multiples are based off forward earnings which are generally near all-time highs, and significantly above the 2019, pre-COVID, levels. Market earnings levels are not depressed in the historical context, and have not seen any absolute downside, apart from some notable subsectors, such as Chemicals, Mining and Transport. Further, the current market valuations need to be put in the context of higher rates than in the past 10-20 years, and meaningfully higher at the short end. If one looks at yield gaps, comparing dividend yield to bond yield, all key DM markets are now trading less attractive than their 20-year average, apart from Japan (OW), which continues to screen cheap. The above considerations add to much higher positioning and more optimistic sentiment than was seen at the start of the year. FOMO is in full swing, there is complacency being built into stocks with VIX at the lows of its range. All this suggests that, if the activity momentum does weaken in 2H, relative to the current projections of no/soft landing, stocks are unlikely to shrug it off, or look through, as they are not priced for disappointment anymore, even if one is to fully take out the Tech/AI/FAANG groups from the equation.
This podcast was recorded on 10 July 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at http://www.jpmm.com/research/content/GPS-4455973-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker - Mislav Matejka, CFA, Head of Global Equity Strategy
The market is increasingly confident that the weak parts of the economy are set to improve, and that the good parts will stay resilient. In a sense, bad is seen as good: “China dataflow is so weak that there must be stimulus, manufacturing PMIs are so weak that they are bound to rebound”. This is producing an interesting divergence in the performance of Cyclicals vs Defensive stocks and the activity dataflow. Compared to a year ago, Cyclicals are up vs Defensives by 20% in Europe and in the US, but manufacturing PMIs and ISM are in contraction territory. Which one will end up right? There was another period when the divergence like this opened up – in 2007, with Cyclicals rallying despite manufacturing activity weakness, and Fed was then also at 5.25%, with the belief that they needed to do more, the same as now. Fundamentally, we think that bond yields will move back down, pricing power is waning, PMIs could indeed converge, but with services coming down towards manufacturing in 2H, as M1 suggests, rather than the other way around, and the hopes of a swift and meaningful China stimulus could remain just that, hopes. The market needs to resolve a basic disconnect: how will the Fed pivot if there is no pain? Bull-Bear has moved into positive territory, Vix is near record low and positioning has increased, there is no more safety net, FOMO is in full swing. Keep UW Eurozone in regional allocation, stay cautious on China, Japan remains our regional OW for this year. Preference for Growth over Value should remain a winning strategy in 2H.
This podcast was recorded on 02 July 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4450902-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speakers: Samantha Azzarello, Head of Content Strategy Thomas Salopek, Head of Cross-Asset Strategy Bruce Kasman, Chief Economist for J.P. Morgan Mislav Matejka, Head of the Global Equity Strategy Stephen Dulake, Global Head of Credit, Securitized Products and Public Finance Research Jay Barry, Co-head of US Rates Strategy Fabio Bassi, Head of European Rate Strategy Jonny Goulden, Head of EM Local Markets & Sovereign Debt Strategy Meera Chandan, Co-Head of the Global FX Strategy Natasha Kaneva, Head of the Global Commodities Strategy
This podcast was recorded on Jun 27, 2023. This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4442931-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
We believe that the broadening in market leadership that was seen at some points this month is unlikely to have legs, as we don’t expect bond yields to move higher, especially not for the right reasons. Cracks in the labour market are emerging, manufacturing PMIs are not converging with services, as consensus was expecting; in fact the opposite appears to be happening, and any China stimulus might end up underwhelming – sell the news. We keep OW Growth vs Value style, and think that pure Defensives could catch a bid – Staples, Utilities and Healthcare, given our projection of falling bond yields in 2H, risk of weaker PMIs and challenging EPS revisions. EPS revisions for S&P500 have finally moved positive for some weeks, the first time since last summer, but any continued improvement will be at odds with a potentially weakening labour market. The claims indicator last week entered into bearish territory. Also, one typically needs composite PMIs above 53-54 in Eurozone for sustained EPS upgrades, but that might be lacking. Manufacturing PMIs are unlikely to bounce much if one considers M1 leading indicators, and the services PMIs are at risk of rolling over, too. This would be reinforced if the labour market is turning, as this could undermine the so far resilient final demand picture, and lead to more destocking. Regionally, we think the trade of OW UK or OW Switzerland vs UW Eurozone should be put on in 2H, we reiterate our downgrade of Eurozone to UW from last month.
This podcast was recorded on 26 June 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at http://www.jpmm.com/research/content/GPS-4445719-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers: Thomas Salopek, Global Cross Asset Strategy Natasha Kaneva, Head of Global Oil and Commodities Research
This podcast was recorded on June 15, 2023. This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4431498-0, and https://www.jpmm.com/research/content/GPS-4436085-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
After three years of La Niña conditions, climate prediction models are forecasting a transition to El Niño later this year. This could mean lower rainfall across parts of Asia, among other effects, and has market implications, particularly in commodity- and consumer-related sectors. A switch to El Niño could also exacerbate the warming effect of climate change and see global temperatures temporarily breach the 1.5°C threshold of the Paris Agreement for the first time. From an ESG and climate change investing perspective, new heat records could refocus the lens on adaptation, which, so far, has proven to be an under-invested theme. J.P. Morgan analysts Jeff Ng, Sin Beng Ong, Jeanette Yutan, Sanjay Mookim and Hannah Lee discuss all of this.
This podcast was recorded on Jun 07, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://jpmorganmarkets.com/research/content/GPS-4401757-0, https://jpmorganmarkets.com/research/content/GPS-4416824-0, https://jpmorganmarkets.com/research/content/GPS-4408623-0 and https://jpmorganmarkets.com/research/content/GPS-4407092-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
Out of larger DM exposures, we started the year with constructive calls on both Eurozone and on Japan. Within this, we have last month cut Eurozone, to outright UW. The question is why stay OW Japan then, given that Japan is typically seen as having a similar type of exposure as Eurozone is, a play on global manufacturing cycle with Cyclical Value sector tilts. We believe that Japan will be a better relative value trade than Eurozone in 2H, even against the backdrop of potential weakening in global activity momentum and likely falling bond yields. Apart from delivering a strong run, of 30%+ in USD terms vs the US since September, we have cut Eurozone due to worsening Growth-Policy tradeoff in the region. ECB is likely to stay hawkish given continued pickup in wage growth, but on the other side the best of the recovery in activity seen at the turn of the year is likely behind us. In addition, we believe China will keep stalling in 2H, with hopes of any material stimulus likely ending up unfulfilled. While Japan is a China and global activity play to a large extent, as well, we stay constructive Japan, reiterating the upgrade to OW made in December. Performance-wise, Japan was behind Eurozone until recently, but it is starting to break out, in USD terms as well, and not just in local FX. The reasons that Japan could act differently this time around are: first, a certain disconnect to the global cycle, on the back of the most delayed reopening within DMs, and the YCC control, driving bond yields divergence, and therefore the divergence in borrowing costs. Second, inflation for Japan could be seen as a tailwind, with real wages expected to finally move up, rising asset values and improving pricing power. In a sense, Japan could be a good hedge on inflation risk, in the event inflation turns out to be more problematic than consensus assumes. Third, Japanese equities remain extremely cheap, with the highest proportion of net cash companies, and there is at long last a catalyst for rerating – in the form of TSE initiative. Japanese buybacks are rising.
This podcast was recorded on 11 June 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at http://www.jpmm.com/research/content/GPS-4435627-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy Mislav Matejka, Head of Global Equities Strategy
This podcast was recorded on June 8, 2023. This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4430667-0, https://www.jpmm.com/research/content/GPS-4430186-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
The real “pain trade” in the market is clearly the breakout driven by Cyclical Value stocks, exactly like what took place on Friday. As a result, MXWO finally closed above the Q1 high. This could have legs if real yields are up for the right reasons, if China stimulates big, or if manufacturing PMIs inflect higher. The narrative behind the Friday move fits some of the above, but we do not see it getting a confirmation. We think yields will move back down, pricing power is waning, labour market signals are more mixed beneath the surface, with WARNs moving up, any China stimulus is unlikely to be meaningful, PMIs could indeed converge, but with services coming down towards manufacturing in 2H, as M1 suggests, rather than the other way around. Up to Friday move, the internal market leadership was extremely narrow. All S&P500 sectors, apart from Tech complex, were flat/outright down on the year. We are more positive on Tech this year than last, but the Tech rally has been quite exceptional, it is looking overbought, and on the other side we do not expect Cyclicals to bounce sustainably. We see Cyclicals stalling again, as typically happens around the last Fed hike in the cycle. Stay OW Growth vs Value, keep fading Cyclical Value, and reiterate last month’s closure of Eurozone vs US trade.
This podcast was recorded on 05 June 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4430186-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Vivek Juneja, Head of Large Cap Bank Research
This podcast was recorded on May 30, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at www.jpmm.com/resehttps://www.jpmm.com/research/content/GPS-4353731-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
After a sharp ~60% rally during Nov-Jan, on the back of the reopening drive, MSCI China has lost 20% since. The latest China economic numbers, for April, have underwhelmed, including IP, retail sales and FAI. This is joining peaking PMIs, 20% lower iron ore price from highs, as well as a big slowdown in China CESI. The concern is weak confidence, which has restricted the broadening of recovery. The consumer might not get stronger, FAI and property are both structurally challenged, the external backdrop might not help and geopolitics could stay tough. Furthermore, our economic team does not anticipate any meaningful new stimulus measures for the rest of the year. Internal consumer mobility metrics have fully recovered, such as subway ridership and domestic flights. Unlike in the US and Europe, there might not be much pent up demand, as Chinese consumers didn’t enjoy significant cash transfers during Covid lockdowns, and there are reports of wage cuts in certain industries. The property market has stabilized, post the sharp fall in activity, but new land sales are lower 30% ytd. The house prices are at risk of weakening. Tier 1 house prices in China are not dissimilar to what was observed in Japan in 1990, in terms of affordability. FAI and infrastructure spend could continue to lag, absent a fresh policy stimulus. FAI shares of GDP remain very high, compared to other countries. We believe that China exposure baskets might keep disappointing and more broadly we remain UW Value vs Growth style this year. China reopening was one of the big supports for Europe trade, where Eurozone beat the US by 30%+ since last September to most recently, in USD terms. The likely China rollover is one of the reasons why we decided to cut this trade earlier in the month. With this closure, we have the OWs on the following regions globally: Japan, UK and Switzerland.
This podcast was recorded on 29 May 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4425285-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
The general perception is that investor bearishness is ubiquitous, but at the same time a potential downturn is not seen as happening anytime soon by the vast majority, and when it comes, it is expected to be rather mild, without much pain to profits, topline or credit. Most importantly, markets need to negotiate what is likely to be an increasingly challenging Growth-Policy tradeoff in 2H, a setup that could look very different to a near “Goldilocks" backdrop that investors got used to in the past 3 quarters. On the Growth side, after a meaningful improvement at the turn of the year, CESIs are down in US, Eurozone and China. After two years of us arguing profit margins will keep showing strength, margins appear to be finally peaking. Consumer and labour markets are resilient, so far, but that can change quickly. Historically, the time that passes from the best labour market prints in the cycle to the next downturn is surprisingly short. Certain labour indicators are softening, and consumer confidence is weakening again. On the Policy/Inflation side, the market is projecting a sharp Fed pivot in 2H, with nearly 70bp of rate cuts priced in by January. If these do not materialize, USD might bounce, strengthening USD is usually a risk-off indicator for markets. Of course, the Fed could stay hawkish for longer for the more problematic reasons, as well – i.e. sticky inflation. Inflation is seen to be on a down path by most, a view we agree with, but the wildcard is the inflation expectations and the wage growth. Notably, inflation expectations in the US consumer confidence survey have moved to 12 year highs. In a sense, the markets in 2H could be caught between a rock and a hard place. We reiterate UW Value style for this year, and low beta positioning, with overall market levels that could provide a better entry point in 2H.
This podcast was recorded on 22 May 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at http://www.jpmm.com/research/content/GPS-4419519-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this All into Account podcast, which is part 2 of our two part series, we discuss the key highlights from our latest J.P. Morgan Perspectives: ESG and Supply Chain Risks: Putting the Spotlight on the “S” and “G” in ESG report. We also discuss key themes emerging in the Social and Governance pillars as well as J.P. Morgan’s proprietary social and governance screens and Human Capital Factor metric developed by our quant research team.
Speakers:
Gloria Kim, Head of the Global Index Research & Co-Head of ESG & Sustainability Research
Jean-Xavier Hecker, Head of EMEA ESG & Sustainability Research
Hannah L Lee, Head of Asia Pacific ESG Equity Research
Khuram Chaudhry, Global Quantitative Strategy
This podcast was recorded on May 10, 2023. This communication is provided for information purposes only. Institutional clients, please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this latest All into Account podcast, which is part 1 of our two part series, we discuss the key highlights from our latest J.P. Morgan Perspectives: ESG and Supply Chain Risks: Putting the Spotlight on the “S” and “G” in ESG report and examine the Social and Governance risks that increasingly impact supply chain resiliency. The current focus on securing resilient supply chains has spurred deeper evaluation of the “S” (Social) pillar, spotlighting human capital management issues related not only to human and labor rights, but also to diversity, equity and inclusion considerations.
Speakers:
Joyce Chang, Chair of Global Research
Sophie Warrick, Head of EMEA Equity Research & Co-Head of ESG & Sustainability Research
Pedro Martins Junior, Head of Emerging Markets Equity Strategy
Stella Y. Xu, Strategic Research
This podcast was recorded on May 10, 2023. This communication is provided for information purposes only. Institutional clients, please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
In a regional allocation, we had a preference for International equities, and within that for Europe over the US, in the past year. We believe that the time has come to close the trade of OW Eurozone vs the US. Europe was the least liked region last summer, when the consensus of economists was that it has already entered a recession, but it has transitioned to a consensus long, a preferred play on China rebound, and has enjoyed a big move up in activity, from 47 Euro Composite PMI in November to 54 currently. Given this, from the low last September to last week, Eurozone equities have advanced as much as 30% vs the US. One should be locking in these gains, especially if our current sector and style views of more Defensive leadership keep gaining traction – Eurozone has always been a global Cyclical Value play. The best of the improvement in Eurozone activity is likely behind us, CESI just turned negative. In contrast, ECB is likely to stay hawkish, due to persistent inflation, implying that the Growth–Policy tradeoff is likely to deteriorate. The region still screens cheap, but it historically acted as a high-beta play on the way down, when discounting past US recessions. China reopening clearly helped European performance, both directly and indirectly, as many investors preferred to position through non-China stocks. However, the best of the momentum is likely behind us, with peaking in China CESI and PMIs, and with many mobility metrics having normalized. Unless China delivers a meaningful fiscal stimulus in the near term, it is unlikely that it will be a positive catalyst for European equities from here. With this change, we now have the following pecking order regionally: we are OW UK, Japan and smaller parts of DM, such as Switzerland, we stay unexcited by EM, Neutral vs DM, and we keep UW in the US, now joined with an UW in Eurozone.
This podcast was recorded on 08 May 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at http://www.jpmm.com/research/content/GPS-4406422-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Tohru joins us to discuss the end of YCC, and where we see fair value for the JGB yield. Rising JGB yields will likely not translate into Yen strength this time around, given the wide short-term yield gap and the trade deficit. But a weak yen should still be a positive for stocks.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Tohru Sasaki, Head of Japan Macro Research
This podcast was recorded on 5 May 2023.
This communication is provided for information purposes only. Institutional clients can view the related reporthttps://www.jpmm.com/research/content/GPS-4391169-0 and https://www.jpmm.com/research/content/GPS-4399337-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka CFA, Head of Global Equity Strategy
Beneath the surface, the leadership is turning Defensive, and away from Value & Cyclicals… we think this rotation continues into/around last hike
In the past weeks, a range of Defensive sectors, such as Staples, Utilities and Healthcare, have rebounded. They joined the already robust performance of the Tech sector ytd. We are more positive on Tech this year than last, but think the sector is becoming stretched in absolute terms now, especially as good results are out in the open. On the other side, many Cyclical and Value plays are losing momentum, among others Mining, Autos, Retail, Construction and Semis, joining the weaker Banks run ytd. We think this rotation will continue as we approach the last Fed hike in the cycle, on the back of our view that US bond yields will be flat/down, and as the Q4&Q1 acceleration in PMIs, and in particular in European PMIs, starts to wane. The narrow and increasingly risk-off internal leadership adds to the main disconnect that the market will need to grapple with: hopes of a soft landing, without much pain to profits, labour or credit, but at the same time the consensus expectation that inflation will come down quickly and that central banks will be cutting in 2H. We believe that the consensus view that the worst of pressures is behind us will be proved wrong, as the impact of monetary tightening worked historically with a lag. Labour markets are lagging indicators, and could weaken abruptly – continued Q1 strength doesn’t mean anything for 2H. We held a view over the past two years that corporate earnings would be resilient, and argued that Q1 results would still be robust, but this is likely to start changing into 2H, as pricing power wanes.
This podcast was recorded on 30th April 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4400022-0.pdf for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Sharing a few of the highlights from the recent IMF meetings of the ‘Markets and Volatility’ panel, which included JP Morgan’s business heads of Trading and Research.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Steve Dulake, Global Head of Spread Research
This podcast was recorded on 01 May 2023.
This communication is provided for information purposes only. Institutional clients can view the related reporthttps://www.jpmm.com/research/content/GPS-4391169-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Steve Dulake, Global Head of Spread Research
This podcast was recorded on Apr 24, 2023.
Our overall market thesis a few weeks ago was that while spreads were in something of a ‘no-man’s land’ valuation-wise, the path of least resistance was likely tighter, based on the continued absence of ‘scary’ headlines, resulting in further declines in volatility. What has changed is market pricing and, as much as the ‘pain trade’ could be tighter still, risk-reward feels much more symmetric today.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4391169-0 and https://www.jpmm.com/research/content/GPS-4391285-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers
Joyce Chang, Chair of Global Research
Stella Y. Xu, Strategic Research
Jean-Xavier Hecker, EMEA ESG & Sustainability Research
This podcast was recorded on Apr 20, 2023.
In this latest episode of our All into Account podcast and video, Joyce Chang, Chair of Global Research, is joined by J.P. Morgan’s Stella Y. Xu, Strategic Research and Jean-Xavier Hecker, EMEA ESG & Sustainability Research discuss the rise of impact investing, how it differs from other ESG investing strategies, size of the market, historical returns and regulations.
While macro drivers such as the generational shifts in wealth from Baby Boomers to Millennials and Gen Xers will continue to drive adoption, this sector is arguably the most challenging ESG investing strategy to implement when considering the duration mismatch between shorter-term financial returns alongside longer-term progress on social and environmental impact.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4377094-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
Regionally, we are OW International equities vs the US, and within this specifically Europe vs the US, a position we held through 2022 and so far ytd. The question is when should one close this trade? Internal leadership might become increasingly difficult for Europe to keep beating the US, especially if our call of Value underweight this year, and the recently introduced preference for lower beta part of the market - where we in particular cut Autos, and added to Staples - keeps gaining traction. So far ytd, Value is behind in both Europe and in the US, and the Defensive stocks are staging a recovery - Eurozone has historically been more of a Cyclical Value tilted play. The big benefits for Europe that we were highlighting in Q4, of falling gas price and the China reopen, are now in the open. Eurozone has enjoyed a strong rebound in PMIs since November on the back of these, of 7 points, but the upmove could be petering out soon. We note that Eurozone valuations vs the US continue to screen cheap, but it appears that the consensus call these days is to be OW Europe vs the US, and the region has strongly outperformed in the past few quarters. Eurozone is up vs the US by 31% in USD terms since the September low. We are remaining OW Europe vs the US, for now, but think that the time to take profits on the trade is approaching. Looking at Q1 reporting season, the consensus expectations have come down aggressively over the past months, from +7% yoy for S&P500, to current -7%. In contrast, activity in most places was better in Q1 vs the previous quarter. The combination of low hurdle rate and the improving fundamentals bodes well for the corporate results, where we expect beats. Having said that, the beats might not lead to upgrades for the rest of the year. 2023 projections keep moving lower. Also, the question is whether the stocks will rally much further on the back of beats, post an already strong rally. We advise to use any strength on the back of positive Q1 results as a good level to reduce from. Finally, consensus expectations are for a renewed margin acceleration in 2024, which could prove too optimistic, as pricing normalizes.
This podcast was recorded on 24 April 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4392460-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this latest episode of our All into Account podcast and video, Joyce Chang, Chair of Global Research, is joined by J.P. Morgan’s Bruce Kasman, Chief Economist, Jan Loeys, Strategic Research, Jahangir Aziz, Head of Emerging Market Economics Research, Luis Oganes, Head of Global Macro Research, and Saad Siddiqui, Emerging Markets Fixed Income Strategy dive deeper into our top ten takeaways from the J.P. Morgan Investor Seminar hosted during the 2023 IMF/World Bank Spring Meetings. The mood was downbeat but not overly bearish in our view, and there were few signs of complacency with “fragmentation,” “setting up guard rails” and “re-globalization, not de-coupling” among the key buzzwords and catch phrases.
SpeakersJoyce Chang, Chair of Global Research
Jan Loeys, Strategic Research
Bruce Kasman, Chief Economist
Luis Oganes, Head of Global Macro Research
Jahangir Aziz, Head of Emerging Market Economics Research
Saad Siddiqui, Emerging Markets Strategy
Related Research:Top 10 Takeaways from J.P. Morgan’s Investor Seminar during the 2023 IMF/World Bank Spring Meetings: Higher for longer despite rising financial stability risks (https://www.jpmm.com/research/content/GPS-4390217-0), Joyce Chang et al., 19 April 2023
Investor Survey Results from 2023 IMF/World Bank Spring Meetings: Recession fears still top of mind with downside seen to current valuations, particularly global equities (https://www.jpmm.com/research/content/GPS-4387732-0), Joyce Chang et al., 17 April 2023
Feeling edgy: Smaller countries make for big stories in DC: Takeaways from IMF/WB meetings (https://www.jpmm.com/research/content/GPS-4390074-0), Nicolaie Alexandru, Ben Ramsey, Katherine Marney, 20 April 2023
Emerging Market Takeaways from IMF/World Bank Spring Meeting (https://www.jpmm.com/research/content/GPS-4386452-0), Luis Oganes et al., 18 April 2023
This podcast was recorded on April 20, 2023.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Eduardo Lecubarri, Head of SMidCap Strategy
This podcast was recorded on April 14, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4375824-0, www.jpmm.com/research/content/GPS-4375240-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
We argued last October that one should be buying back the Tech sector, following a year of sharp underperformance, and given our view that US long yields had likely peaked at tat point. The question is, will Tech keep driving the market higher? So far ytd, S&P500 is up 7%, but ex-Tech this stands at just 2%. FAANG is up as much as 26% ytd. We continue to believe that Tech will be trading better this year than it did last, but at the same time, think that the recent Tech run is becoming stretched, in absolute terms. It is looking overbought, close to all-time highs, with RSIs that are nearing elevated territory. Valuations of the sector are up meaningfully from last October, with FAANG P/E back at 1 standard deviation expensive. Globally, Tech P/E relative is closing in on 20-year highs. Our call is that bond yields will be down further from here, but the Tech bounce appears to have over-discounted that now. In addition, the clear and rising risk is that the Fed does not deliver on market expectations for cuts in 2H of the year. Real rates could stay higher, with Tech inversely correlated to them. With respect to the earnings outlook, consensus expectations are for the Technology sector to expand its profit margins by as much as 140bp next year, the largest increase of all sectors, and which would put it at new all-time highs. We see risks to this, especially if the economy weakens into a downturn Within Tech, we argued that unprofitable parts will not perform, with our more positive stance on quality, good cash flow parts. We continue with this view. Non-profitable Tech and Fintech are underperforming by 10-20% since October, even as they are becoming more attractively valued. In conclusion, we do not advocate to be short Tech, and still think the sector will be trading better than last year, relative to the market, but think that its absolute run is becoming stretched. In general, we believe that positioning in pure Defensive plays – where we have recently advised to add to them – such as Telecoms, Utilities, Staples and Healthcare, could be the best place to be over the next months.
This podcast was recorded on 11 April 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/ for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
As the regional bank stress subsides, we consider whether US High Yield or Leveraged Loans will be the next weak link to snap. Nelson joins us to share his market views.
Speakers
Thomas Salopek, Head of Global Cross Asset Strategy
Nelson Jantzen, Head of US High Yield and Leveraged Loan Strategy
This podcast was recorded on Apr 04, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4375240-0, https://www.jpmm.com/research/content/GPS-4377007-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers
Thomas Salopek, Head of Global Cross Asset Strategy
David Aserkoff, Head of CEEMEA Equity Strategy
This podcast was recorded on Mar. 27, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4267128-0, https://www.jpmm.com/research/content/GPS-4328949-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
Our view remains that Q1 will have likely marked the high point for equity prices for this year, and we look for recessionary trading in 2H, with low beta preference, and an increasing caution on Cyclicals/Banks/Value exposure. As the initial SVB/CS driven correction was sharp, we argued last week that market appeared oversold short term, with relief bounce likely, but also that one should use the bounces to reduce exposure. We do not see these rebounds persisting, the policy mistake risk keeps building. In a nutshell, we do not expect a fundamental improvement in equities risk-reward until the Fed is advanced with rate cuts. Within this, we believe that the bonds-equities correlation is reversing. Both bonds and equities lost money in 1H of last year, then both made money into year-end ’22 – the correlation was positive. As the recession odds are likely increasing again for 2H of this year, in our view, we think the correlation is likely to go back to a normal, inverse one. This should mean that, in down markets, low beta works, as is typical of risk-off trading, and is opposite to last year, when Value worked. The point of the last Fed hike in the cycle is approaching, and we note that bond yields move strongly lower in the aftermath of last hike. Looking at market internals, there is a clear preference for low beta bond proxies into, and post, the last Fed hike in the cycle. Healthcare and Staples were the consistent outperformers. The question is how does this align with what is still seen as a robust labour market. We see the labour market as a lagging indicator of the cycle, it is likely that there is already weakening beneath the surface – note the construction job openings falling, and the Challenger job cuts moving up. It is notable that the amount of time that passes between the best/lowest unemployment rate in the cycle, and the official start of a recession, is quite short historically. It would not be unusual for the economy to see the best labour market prints in Q1 of the year, only for the 2H to potentially show recessionary behaviour. Will lower yields help equity valuations? Equity dividend yield vs bond yield gaps, vs historical averages, are not overly exciting, at present. US and Eurozone have DY-BY gaps below what is seen on average, while only Japan stands out as a clear positive. Cash at near 5% is a very high hurdle rate to surpass to be long risk assets at this stage.
This podcast was recorded on 26th March 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4369291-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Srini Ramaswamy, Co-Head US Rates Strategy
Ipek Ozil, US Interest Rate Derivatives Strategist
This podcast was recorded on March 23, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4363888-0, www.jpmm.com/research/content/GPS-4363906-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this episode of our All into Account podcast Joyce Chang, Chair of Global Research is joined by US Economist Daniel Silver, Head of US Retailing Matthew Boss and Head of European General Retail Georgina Johanan to discuss J.P. Morgan Research’s bi-annual US and EMEA consumer surveys, which provide a pulse check on consumer sentiment and spending plans ahead. The US survey reflects the trend of 1,000 consumers in March, while the European survey reflects the trends of 5,000 consumers in March. They highlight that consumers face increasing affordability pressures, and in the US, tighter financial conditions are eroding cumulative excess savings.
Speakers:
Joyce Chang, Chair of Global Research
Daniel Silver, US Economic Research
Matthew R. Boss, Head of Retailing: Department Stores & Specialty Softlines
Georgina Johanan, Head of European General Retail
This podcast was recorded on March 22, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4358197-0, www.jpmm.com/research/content/GPS-4358583-0, www.jpmm.com/research/content/GPS-4363373-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this latest episode of our All into Account podcast Joyce Chang, Chair of Global Research is joined by Head of Women on the Move at J.P. Morgan Chase & Co, Samantha Saperstein, along with Amy Ho and Stella Xu from Strategic Research to discuss the highlights from their annual report on gender balance, J.P. Morgan Perspectives: The state of global gender balance in 2023. Their discussion delves into the details on the progress towards achieving gender balance and assesses the challenges facing women as we approach the end of COVID-19 as a public health emergency on May 11 in the US.
SpeakersJoyce Chang, Chair of Global Research
Samantha Saperstein, Head of Women on the Move
Amy Ho, Strategic Research
Stella Y. Xu, Strategic Research
This podcast was recorded on 16 March 2023.
This communication is provided for information purposes only. Institutional clients visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
We stick to our call that Q1 will likely end up the high point for stocks this year. While parts of the market look short term oversold, and there could be potential relief bounces, we advise to use these to sell into. It is unlikely that we will have a fundamental low reached until the Fed is well advanced with rate cuts. We argued three weeks ago that the next trade is likely to go UW Value, and that one should be defensive in portfolio allocation. Fundamentally, this call is predicated on the view that bond yields will be moving lower, in effect marking a double-top for the US 10-year yield at ~4%, along with a likely end of PMI rebound soon, as the impact of past policy tightening starts to take full effect, and the positive offsets, such as the cushion of COVID savings for consumers, erode. March PMIs could still be sequentially higher, continuing the streak from November of an improvement driven by gas price fall and China reopening, but that could be nearing the peak. Money supply trends point to renewed weakness in PMIs in 2H. The yield curve is likely to be proven right, as every single time in the past. Even if one were to believe that yield curve will stop flattening, perhaps as central banks pause, if the Fed were to pass on a hike this week for example, this might not be a helpful sign. After all, the curve would typically begin to steepen just ahead of a recession starting. From the point of maximum curve inversion to the start of recession, the sector leadership would be dominated by low beta bond-proxy defensives, and Banks in particular tended to perform poorly. Central banks could keep their “higher for longer” mantra. Labour markets and inflation continue to be some of the most lagging indicators of the cycle, and as inflation stays elevated, the pain threshold for the Fed might be higher this time around than what investors would hope for – the market could be increasingly pricing in a policy mistake. Banks and Cyclicals performed strongly in the past few quarters, and even post last week’s correction are still elevated. It is not clear that Cyclicals enjoy valuation support vs Defensives anymore, and their earnings will be more sensitive to potential consumer and corporate disappointments ahead.
This podcast was recorded on 19 March 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4363473-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers Thomas Salopek, Head of Global Cross Asset Strategy Khuram S Chaudhry, Head of European Quantitative Equity StrategyThis podcast was recorded on Mar. 10, 2023. This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4357479-0, https://www.jpmm.com/research/content/GPS-4352510-0.pdf for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
UK equities have performed well last year, the best DM region, outright up in local currency, and beating the US by 12% in USD terms. The question is whether one should remain positive on UK stocks this year, especially in light of potentially weaker performance of Value style from here. After being bullish Value last year, our call is that Value style will not outperform Growth this year. So far ytd, MSCI Value over Growth is at 0% in Europe and -11% in the US. While Value style tailwind might not be there anymore, and possibly even China & commodities support could peter out by mid-year, we think there are other positives for UK stocks. These are primarily defensive plays, with lower than 1 beta to global equity direction, and lower than 1 beta to global PMIs movement. If Q1 proves to be the peak of the equity market for this year, as we believe, post the strong rally from October that we enjoyed, the UK could be a relative outperformer. The UK is the highest dividend yielding of the DMs, with 4.2% yield, and fully covered this time around, with payout ratios 10-15% below typical. We think there is a good chance that in 2H US 10-year bond yields move back lower, potentially aggressively lower, with further record yield curve inversion, which could make dividend yield pickup strategy very attractive. Also, the UK market still looks exceptionally cheap, at 10x forward EPS, in contrast to US at 18x - continuing to offer record discount. FX could stay a tailwind, where UKX derives 70% of topline from abroad. We have been OW UK in a regional portfolio since Nov ’21, after 6 years of a bearish stance. The UK was our top regional pick in 2022, and we stay OW for this year, in a relative context. In particular, we think FTSE100 still looks better than S&P500. Within UK, we keep our long FTSE100 vs FTSE250 trade, which we opened in Nov ’21. Certain domestic plays have seen a good relief bounce, but in general we think that the UK consumer is likely to struggle given the delayed impact of rising interest rates. House prices are at risk of softening, housing affordability has deteriorated rapidly and consumers have likely burned through the COVID excess savings. In terms of sectoral tilts, Defensives have lagged so far ytd. UK has a greater share of these than Eurozone/US, at 40%, and has been at a disadvantage. While we have been short Staples, Real Estate, and only Neutral Healthcare, we do think that Defensives are set to start performing much better, which will then become a tailwind for the UK market.
This podcast was recorded on 12 March '23
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4357060-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
We stay OW International markets vs the US, even as Q1 likely marks the peak overall; Keep unwinding longs in Value vs Growth factor; We are still UW Staples, UW Real Estate and Neutral Healthcare, but the big Cyclical rally is set to run out of steam
Divergences keep building, on one hand between robust equity prices and falling earnings, where Q4 reporting season has not delivered a typical upswing, for the first time, and on the other hand between elevated P/E multiples and rising bond yields. These are likely to contribute to our view that stocks’ highs are in Q1, and will weaken thereafter. The light positioning and the overly bearish sentiment that we were counting on to keep lifting markets in the early part of this year are no longer the case. Positioning has largely normalized, and sentiment is far from negative now, it is hopeful in fact – recession is not a base case anymore for most. Our core view is that the current activity upswing is unlikely to develop into a fully fledged acceleration in 2H. After all, the impact of the policy tightening works with a lag, and central banks are far from even pausing, let alone pivoting. Big picture, we looked for regional convergence over the past year, and encouragingly International markets have done better than the US, with Europe in particular outperforming, in both the local and common FX. We continue to believe that International equities will be trading better than the US, even if, as we suspect, equities do not hold on to the rally seen over the past months. Our key positioning over the past year was to be long Value vs Growth, but we have entered this year Neutral on the Value/Growth trade, advising in October to close the shorts in Tech, and we think the next trade will likely be to go outright UW Value. Sectorwise, we are still outright UW Staples and Real Estate, and only Neutral Healthcare in our portfolio, but look to use the last 6-8 months strong Cyclicals run to reduce the beta of the portfolio as Q1 winds down.
This podcast was recorded on 05/03/23
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content//GPS-4351097-0.pdf for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
After a very strong factor differential last year, where MSCI US Value beat MSCI US Growth by as much as 30%, and by 25% in Europe, our call entering 2023 was that Value over Growth spread will be much lower this year. This is partly driven by our view from October that inflation has peaked, and that bond yields in the US are set to stall/move lower, in particular in 2H of this year. The relative Value vs Growth factor performance is sensitive to bond yields movement. Further, we see the risk of a rollover in activity momentum into mid year. Eurozone CESI has moved from -100 last summer to +100 last month, and is likely peaking out again. Even if activity does not show a clear slowing, the setup for Value style might not be all that great going forward. In the case that activity stays resilient, and inflation consequently proves sticky, central banks are then unlikely to go on a pause/pivot, and could keep hiking. This would mean that yield curve stays inverted, and perhaps gets even more extreme. Value factor needs steepening yield curve to work. Our core view is that in 2H market will be moving back to the recession trade, but even in the opposite scenario, Value might not be the best place to be. We have moved from OW Value vs Growth stance in 2022, to the Neutral stance at present, as we advised closing shorts on Tech in Q4. Probably the next move, in 1-2 months, will be to go outright UW Value vs Growth. Of note, Japan likely stands out as the odd one out, where the bond yields adjustment is more delayed, due to YCC. Longer term, value is still in Value style, so this should be seen as a tactical, 6-12 months call. Big picture, at the overall market level, we continue to believe that Q1 will mark the high point for the index levels this year, as the fundamental uplift does not come in Q2/Q3, post the relief in activity that is seen in Q1. This suggests that one should be turning more defensive as we move to quarter end.
This podcast was recorded on 26 February 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4344429-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
J.P. Morgan Speakers:
Dubravko Lakos-Bujas - Chief Global Equity StrategistMislav Matejka - Head of Global Equity StrategyPedro Martins Junior, CFA - Emerging Markets Equity StrategyPodcast recorded on Thursday, February 23 @ 8:30am ET / 13:30 UK
Speaker: Mislav Matejka, Head of Global Equity Strategy
The equity market rebound since October is drawing investors in. Many, who were convinced last summer that any rally should be seen as just a bear-market rally, are now nurturing increasing optimism that recession can be avoided altogether and that earnings could stay resilient. While we were looking forward to a market rebound from Q4 of last year, and believe that initially Q1 will stay robust, given what was light positioning and supportive seasonals, we do not expect that there will be a fundamental confirmation for the next leg higher, and see rally fading as we move through this quarter, with Q1 possibly marking the high for the year. The key monetary signals are sending warning signs: 1. Yield curve is staying heavily inverted. We have never escaped a recession from this point. 2. Money supply keeps moving lower in both the US and in Europe. In fact, US M1 has entered outright contraction territory, on a yoy basis, for the first time since 2006. 3. Bank lending standards have been tightening, with a sharp falloff in demand for credit, similar to what has been seen ahead of past recessions. 4. Are market expectations for Fed cutting rates in 2H going to be vindicated, especially if there is no pain in the real economy? We could indeed see a Fed pivot, but perhaps only in response to a much more problematic macro setup than the market is currently looking forward to. Historically, equities do not typically bottom before the Fed is advanced with cutting, and we never saw a low before the Fed has even stopped hiking. It might be premature to believe that recession is off the table now, when Fed will have done 500bp+ of tightening in a year, and the impact of monetary policy tended to be felt with a lag on the real economy, of as much as 1-2 years. The damage has been done, and the fallout is likely still ahead of us. US mortgage payments as a share of income doubled, and the savings rate has gone down almost to zero. 5. Finally, even as the Fed goes on a pause after March/May, quantitative tightening will stay in the background. A year ago, a measure of “excess liquidity” – the expansion of central banks’ balance sheets relative to the growth in the nominal economy, has peaked, and started to contract for G5. In 2022, the differential was at -5%. This year, excess liquidity reduction is likely to be much more significant, at -14%. The question is whether financial markets will absorb this without any hiccups, especially after the complacency has crept in, with VIX at 20 and Bull-Bear optimistic now.
This podcast was recorded on 19 February 2023
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4338331-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
The latest data show a US (and global) economy that is not only proving more resilient than some had feared but also more inflationary. The odds have risen for an expansion that may be in need of central banks stepping on the breaks more than we had expected and even more than markets.
Speakers:
Bruce Kasman
Joseph Lupton
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:Thomas Salopek, Head of Global Cross Asset Strategy
Ralph Sueppel, Managing Director of Macrosynergy
This communication is provided for information purposes only. Institutional clients can view the related reports at www.jpmm.com/research/content/GPS-4332679-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this latest episode of our All into Account podcast Joyce Chang, Chair of Global Research is joined by our colleagues in Japan, Ayako Fujita, Chief Japan Economist, Tohru Sasaki, Head of Japan Macro Research, Takafumi Yamawaki, Head of Japan Fixed Income Research, Ben Shatil, Japan Senior Economist and Rie Nishihara, Head of Japan Equity Strategy, to discuss Japan’s exit from negative yields and a low inflation equilibrium, including the longer-term implications for global markets and liquidity from our recently published note J.P. Morgan Perspectives: Japan’s Big Exit: Ten Questions about Japan’s Regime Change.
Speakers:Joyce Chang, Chair of Global Research Tohru Sasaki, Head of Japan Macro ResearchAyako Fujita, Chief Japan EconomistTakafumi Yamawaki, Head of Japan Fixed Income Research Benjamin Shatil, Japan Senior EconomistRie Nishihara, Head of Japan Equity Strategy
This podcast was recorded on February 13, 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4320561-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
Big picture, we believe that the equity rally that we hoped would be driven by peaking bond yields/CPI, China reopening, and the fall in European gas prices, is unlikely to get the fundamental confirmation for the next leg higher as the year progresses. Once the positioning recovers, Q1 is in our view likely to mark the high point of the market. Given this setup, the question is why not do the traditional regional shift, out of International plays and back to the US. We do not believe that the best way to position for the upcoming risk reduction that we envisage is to favour the S&P500. We argued for a convergence trade entering 2022, out of the US and into International, and would advise to keep it, even with potential equity weakness from here. US might not be a good place to hide this time around, as Technology is moving from secular to cyclical. Despite our view of peaking bond yields from October, when we advised to close the shorts on Tech, the sector is unlikely to be a sustainable leader; it is still priced not far from all-time highs. This is not a great starting point. Further, we do not believe that Tech will be immune to any potential earnings disappointments in a downturn, in contrast to the past decade. Valuation differential remains clear, with US trading at 18x questionable earnings, compared to Eurozone and Japan at 12-13x, and FTSE100 at 11x. Eurozone is trading at a bigger discount than typical vs the US, even when adjusting for the different sector composition. On margin, China reopening and lower gas prices favour Europe, while politics could be a problem for the US this year, especially with respect to the debt ceiling. We are certainly not calling for a decoupling. Having said that, it is notable that in the 1970s there were long periods when European markets performed much better than the US, even when the US was down materially. In our regional allocation, we held OW on Europe vs US through the last 12 months, with the preference for FTSE100 within Europe. We keep this regional bias, for now, despite the 25% relative outperformance of Eurozone since September, in USD terms. There might be a time coming up to take profits on Europe vs US trade, perhaps closer to the China reopening getting more fully priced it, but we do not advocate it just yet.
This podcast was recorded on 12 February 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4331948-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Helped by resilient fundraising and smoother valuations, the reported AUM of the universe of Alternative Investments (AI) likely ended 2022 only modestly lower from 2021 despite last year’s correction in asset prices. While the valuation gap between private and public markets remains, the gap has narrowed significantly in recent months reducing a previous headwind for private assets. New loans in the private credit market are being originated at much wider spreads, around 200bp wide of public market pricing. We thus upgrade private credit to overweight within alternatives along with hedge funds. We downgrade digital assets given the drying up of crypto VC funding.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Nikolaos Panigirtzoglou – Global Markets Strategy
Nelson Jantzen - US High Yield & Leveraged Loan Strategy
Mika Inkinen - Global Markets Strategy
Federico Manicardi - Cross-Asset Fundamental Strategy
Nishant Poddar – Global Markets Strategy
This podcast was recorded on date.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4325496-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
The stock rally that started in the Fall of 2022 benefited from very low positioning and peak bearishness. Now positioning is no longer stretched and sentiment assumes a relatively pain-free soft landing. The rates moves are already well priced into stocks, and with the VIX at ~18 indicating complacency, stocks can be prone to a stress event this quarter, with weak earnings and geopolitics possible drivers.
Speakers Thomas Salopek, Head of Global Cross Asset Strategy Mislav Matejka, Head of Global Equities Strategy Jason Hunter, Head of Technical Strategy This podcast was recorded on Jan. 7, 20232. This communication is provided for information purposes only. Institutional clients can view the related reports at www.jpmm.com/resehttps://www.jpmm.com/research/content/GPS-4325942-0, https://www.jpmm.com/research/content/GPS-4325446-0.pdf, and https://www.jpmm.com/research/content/GPS-4325211-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
Some of the equity market supports that we were highlighting in Q4 – peaking bond yields, China reopening, lower European gas prices – are not exhausted, but a lot has repriced. SX5E is up 30% off the lows, and MSCI China up 55%. We argued that supportive seasonals at the start of the year and light positioning would still be helping as we move through Q1, but positioning is quickly normalizing. Sentiment was very downbeat 6 months ago; now investors are more comfortable chasing the market, with a bounce back towards neutral in Bull-Bear indicator, stretched RSIs, rebound in HF betas and a fall in Put/Call ratios. Crucially, we think the fundamental confirmation for the next leg of the rally will end up lacking, consequently Q1 will likely mark a high-water mark for the market. The cushion of consumer excess savings has been eroded, and money supply in the US and Europe keeps contracting. We held a view over the past two years that corporate earnings would be resilient, but this might start changing. Profit margins are at a record, currently much higher than pre-COVID-19, and pricing power is likely to deteriorate from here. Q1 results are coming out mixed, to date, with a sharply reduced proportion of beats, and the typical upward revisions that one sees as we move through reporting season so far are missing. Apart from likely renewed deterioration in fundamentals in 2H, potential curveballs could come from US politics, among other, as the market is now becoming complacent given that VIX is near the low of the range, at only 18x. International markets continue to screen as much more interesting than the US: stay long Europe vs SPX, keep OW FTSE100 and keep OW MSCI China. We were bullish Value vs Growth style last year, but this year look for stalling in Value, especially if our October call for peaking US yields keeps tracking. Finally, use the remaining Q1 rally to cut beta of a portfolio.
This podcast was recorded on 05 February 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4325446-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
EM fixed income assets have continued to rally, but in the near term risk appetite has probably gone a little too far. Our EM FX Risk Appetite Index shows overbought conditions in EM FX, and EM sovereign positions are now firmly OW according to our Client Survey. There are fewer signs that EM rates markets are overly positioned, so we continue to be bullish local bonds.
This podcast was recorded on January 30, 2023.This communication is provided for information purposes only. Institutional clients can view the related reports at www.jpmm.com/resehttps://www.jpmm.com/research/content/GPS-4317702-0, https://www.jpmm.com/research/content/GPS-4319230-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
The main catalysts that we were looking for to drive an equity market recovery are being worked through. Entering Q4 of last year, we called for the peak in bond yields, China reopening to be the first next trade to position for, and finally for European gas prices to move lower as we enter winter, given ample supply. Our stance is that, in Q1, initially the market will keep moving higher, given good seasonals, light positioning and re-risking drive, but also that ultimately one should end up fading this upmove. Q1 will, in our view, likely mark a turning point, as the fundamental confirmation for the next leg higher might not come, and instead stocks could hit an air pocket of weaker earnings and activity as we move through Q2 and Q3. Beyond the still sharply decelerating money supply in the US and in Europe, inverted yield curve, no Fed pivot in sight and the continuing QT in the background, we believe that what was a very resilient corporate profits backdrop over the past two years will start to turn lower, as the pricing power reverses. What does that mean for capex? We see all three key drivers of capex deteriorating. Corporate earnings historically had a very strong leading correlation with capex plans. Second, Banks’ lending standards have been tightening of late, and the availability of credit has a clear relationship with capex spend. Finally, utilisation rates could weaken again as the year progresses, which also impacts capex. These three hold both for the US and for Europe. Capital Goods stocks have been the beneficiaries of the current rally, now back to price relative highs. They have never really had much of an earnings and topline reset, such as would be seen in past downturns. Their EBIT margins are at record highs, and their P/E relatives are also at record. We think Capital Goods will be one of the sectors that will start to face a more challenging backdrop as we move through the year, as the current rally that we were looking forward to peters out.
This podcast was recorded on 30 January 2023
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4318863-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Federico Manicardi, Cross Asset Strategist
This podcast was recorded on 25 January 2023.
This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4286579-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy
The consensus view over the past two years was that margins were at risk of contraction given the big spike in input costs. We disagreed. We maintained a bullish earnings view as inventories were non-existent and as consumers were flush with cash, legacy of excess savings from COVID times. This backdrop enabled corporates to use the spike in input costs as an opportunity to raise prices. Indeed, the correlation between PPIs and corporate profits has historically been strongly positive. We believe that this correlation will continue to hold, but from here in the negative direction. This is especially as corporate inventories have been rebuilt, supply chains normalized and COVID dislocations finished. In addition, there is no further extraordinary support for the top line in DM, as pent-up demand has been exhausted, and the once dramatic consumer excess savings have been eroded. One could see increased discounting and downtrading. It is notable that the intentions of corporates to raise prices have rolled over sharply in the past few months. The risk-reward is more challenging still given that US and European profit margins are at historical highs, significantly above pre-COVID levels. Earnings projections for 2023 have been cut somewhat, but consensus is still looking for upside this year, and a meaningful acceleration next year. These are at risk. The question is whether the negative impact will start already with Q4 results, or will it be delayed to later this year. PMI momentum suggests that the earnings growth rate in Q4 should have moved into negative territory, but even if companies do not disappoint for Q4, we do not believe EPS upgrades are likely in 1H.
This podcast was recorded on 22 January 2023
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Our analysts discuss China’s re-opening, what it could mean for financial markets, and how it could impact the global economy.
Speakers:
Wendy Liu – Chief Asia and China Equity Strategist
Thomas Salopek – Head of Cross Asset Strategy Research
Haibin Zhu – Chief China Economist and Head of Greater China Economic Research
Moderator:
Samantha Azzarello – Head of Content Curation and Strategy
This podcast was recorded on 11 January 2023.
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https://www.jpmm.com/research/content/GPS-4300063-0
For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
We believe that the current market rally will start fading as we move through Q1. The positive catalysts that we were highlighting from October, and which helped drive a rebound of as much as 27% for SX5E – peak in bond yields, in inflation and in USD, China reopening and more benign European gas prices – are now in the open. While January still offers favourable seasonals, and the current investor positioning is far from heavy, both of which support stocks for the time being, we believe that one should be using potential gains over the next weeks in order to reduce exposure. All Cyclicals performed very strongly, and all Defensives lagged over the past six months. In fact, Cyclicals vs Defensives unwound all the losses seen in the 1H of last year, back to highs. The market is behaving as if we were in an early cycle recovery phase, but the Fed has not even concluded hiking yet. Typically, this phase is seen only after a period of Fed cuts. We stick to our call from October that bond yields have likely peaked, and will still be flat/down in 1H, which typically helps Defensives. Also, Cyclicals appear to be pricing in the rebound in PMIs back to solid expansion territory in 1H, but our lead indicators point to more softness. Finally, earnings are likely to be challenged next. We maintained a bullish earnings view over the past two years, as the spike in PPIs was used by corporates as an opportunity to raise prices. Far from seeing a margin squeeze, profit margins improved significantly for most. This will change: we look for downside to earnings for Cyclicals, on weaker pricing. At some point in 2023, Cyclicals are likely to rally more sustainably, discounting a fundamental inflection point in PMIs and a bottoming out in earnings, along with a potentially clearer pivot by the Fed, but this is not yet, in our view.
This podcast was recorded on 16 January 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4307377-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
In this new episode on J.P. Morgan Research’s All into Account podcast we discuss our top 10 strategic and long-term investment themes driving global markets and economies in 2023 and beyond from our recently published report “The Great Repricing: A boost to future returns”.
Joyce Chang, Chair of Global Research is joined by Bruce Kasman, Chief Economist, Jay Barry, Co-Head of US Rates Strategy, Natasha Kaneva, Head of Commodity Strategy, and Jan Loeys, Head of Long-Term Strategy, which is part of our Strategic Research team, to discuss their market views and investment outlook.
Speakers:
Joyce Chang, Chair of Global Research
Bruce Kasman, Chief Economist
Jay Barry, Co-Head of US Rates Strategy
Natasha Kaneva, Head of Commodity Strategy
Jan Loeys, Head of Long-term Strategy
This podcast was recorded on January 12, 2023.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
SX5E rebounded 23% during Q4, to last Friday high. Out of the key supports for the equity market, we called in October for a peak in bond yields, as we believed that the disinflation phase had already likely begun. In addition, we argued in November that China reopening was the next trade and for Europe specifically we called for natural gas prices to fall despite entering winter, as supply is ample. Now, while some of the above highlighted supports for the equity market are not by any means exhausted, a lot has repriced, and the market focus could turn to earnings, which are likely to be weaker, and that could contribute to market consolidation ahead. The peak in inflation, which we believe is very helpful to stabilize P/E multiples, will in turn end up as a negative for corporate profits, especially as earnings benefitted from strong pricing and mix post COVID-19. In addition, the recent better activity prints might not hold. Real M1, our lead indicator, is pointing to more PMI softness. Also, the disinflation path might not be smooth, and US politics, as well as the Fed, could deliver curveballs. Put together, we think the current rally will end up faded as we move through Q1. We advise taking some profits, to tactically reduce equity exposure. Big picture, we looked for regional convergence over the past year, and encouragingly Europe is now outperforming the US in both the local and common FX. Stay with this. We also keep long commodity equities on peaking USD, China reopening and low inventories. We believe that one should start fading the last six months of a Cyclical rebound, and add back to some Defensives that lagged – such as to Utilities, Healthcare and Telecoms, as bond yields, PMIs and EPS revisions are all more likely to be lower, than higher, in 1H. While at some point in 2023 Cyclicals should enjoy sustained bottoming out in PMIs and in EPS revisions, their recent rally could end up looking premature.
This podcast was recorded on 09 January 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4301171-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.
Speakers & Moderators:Marko Kolanovic, PhD, Stephen Dulake, Dubravko Lakos-Bujas, Luis Oganes, Thomas Salopek, Jay Barry, Arindam Sandilya, Michael Hanson, Natasha Kaneva, Mislav Matejka, CFA, Fabio Bassi, Joyce Chang
This podcast was recorded on December 09 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4281691-0for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
In this episode of All into Account, Joyce Chang, Chair of Global Research and Amy Ho, Strategic Research welcomes J.P. Morgan’s Pat Opet, Global Chief Information Security Officer, Doug Anmuth, Head of U.S. Internet Equity Research and Haibin Zhu, Chief China Economist to discuss the impact of the Russia-Ukraine war on cyber policy, China’s continuing cyber rise, current policy responses and market implications. Cyber competition and geopolitical tensions have become inextricably linked with nation state cyberattacks on the rise and internet freedom on the decline. We assume an ongoing, constant state of cyber aggression as the new normal and do not see the introduction of a coherent cyber deterrence framework in the short term, while the cybersecurity threat is set to grow in intensity and scale for the foreseeable future.
Speakers:
Joyce Chang, Chair of Global Research
Patrick Opet, Global Chief Information Security Officer
Doug Anmuth, Head of U.S. Internet Equity Research
Haibin Zhu, Chief China Economist
Amy Ho, Strategic Research
This podcast was recorded on 13 December 2022.
This communication is provided for information purposes only. For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
In this episode we discuss ESG in the USA which focuses on the growing ideological divide on ESG at the state level and Midterm election implications, the impact of the Inflation Reduction Act on US climate policy and recent trends in ESG investing in a challenging year. While the Midterm election produced barely a red ripple, opposition to ESG initiatives is set to increase in the 118th Congress, which will exacerbate the growing divide on ESG in the US.
Speakers:Joyce Chang, Chair of Global Research Stella Y. Xu, Strategic ResearchKamal Tamboli, Equity Strategy and Global Quantitative ResearchNathaniel Rosenbaum, US High Grade StrategyKhuram Chaudhry, Global Quantitative Strategy
This podcast was recorded on 6 December 2022.
This communication is provided for information purposes only. Please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
Our base case for next year is a recession in Europe and the US, we keep our call for 10% European EPS contraction in 2023. On the positive side, we believe that the rise in bond yields, rise in central bank rates relative to where futures already are, the surge in inflation and the spike in the USD are all likely coming to an end. In addition, as we move through 2023, we will likely see the bottoming out in PMI momentum, as well as a trough in EPS revisions, along with more visible China reopening. These catalysts are likely to ensure that the equity performance, which stands to be pressured by the earnings and activity reset over the coming months, firms up as we move through the second half of 2023. European forward P/Es went from 16x a year ago to 9-11x at the recent low; the P/E compression is unlikely to continue, especially as our rates call is for lower Europe yields from here. Our earnings downside of 10% is smaller than the typical 20-40% seen in past downturns, given better topline, pricing, FX impact, and already enacted cuts. Consequently, we expect higher equity levels at year end than what could transpire in the interim, and net-net have Dec ‘23 index targets above current spot prices. Regionally, S&P500 risk-reward remains relatively unattractive, and we keep our call for convergence, out of the US and into International. We expect this to work in 2023 in USD terms as well, and not just in local currency as was the case this year. Within International markets, UK was our top pick for this year, and we keep our OW on FTSE100 in DM, and a pair trade of OW FTSE100 vs UW FTSE250. At a sector/style level, as we move through the year Cyclicals are likely to anticipate bottoming out in activity, perhaps some time in Q2. In the interim, while the earnings get reset and as PMIs decelerate further, we continue to stay away from the key Cyclicals such as Industrials, Chemicals, Construction, as well as from consumer plays – Autos and Retail. Within Defensives, we keep OW Telecoms, and add to Healthcare (UW to N). The sector did not do all that well in 2022, and could be a good compromise entering 2023. We also add to Utilities (N to OW), where SX6P performed in line with the overall market this year, but will likely have superior EPS growth in 2023, and benefit from peaking yields. Banks (OW to N) have outperformed the broader market this year by 700bp, and we take some profits, on lower yields and continued inversion of the yield curve ahead. We keep long commodity equities for now, despite an already strong run in 2022. Tech could tactically continue to stabilize if our call of peaking yields gains further traction, but it is unlikely to be a sustained leader – we keep our long-term OW Value vs Growth style stance.
This podcast was recorded on 30 November 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4266987-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Peng joins us to discuss zero day options: why they’ve become popular, who’s using them, and what impact they are having on markets.
Speakers: Thomas Salopek and Peng Cheng
This podcast was recorded on 22 November 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at:
https://www.jpmm.com/research/content/GPS-4265817-0.pdf
For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
Our key call at the start of Q4 was to look for the likely peaking out in bond yields, as we believed the disinflation phase has already begun. The potential turn in yields and in inflation has implications for equity P/E multiples, which could find the floor, and for the Growth/Tech part of the market to show a better trading performance. USD typically had an inverse correlation with equities, and any stabilization there would be a support. A peaking in Fed hawkishness would go a long way in taking the upside away from the USD. EM have this year lagged the DM, with the China drag the most notable. Even ex China, EM have underperformed the DM. The potential shift in USD fortunes would in particular be relevant for EM equities, as these historically had a strong inverse correlation to the USD. In addition, while the longer-term picture for China looks challenging given the structural growth downtrend, corporate decoupling and geopolitical uncertainty, the reopening is likely to be an important trade. This is especially the case given the extremely easy comps, such as near record low property starts. Policy responses are ramping up in order to set floors for real estate and credit, and sentiment is rock bottom. How to play this? China and Taiwan equities are down 30% ytd in USD terms, with Chinese P/E relatives at lows. Indirectly, European markets are the beneficiaries of any improvement in China prospects – FTSE100 remains our top country pick. We started this year OW on commodity sectors, and China reopening supporting the turn higher in activity indicators is welcome. Energy (OW) continues to have attractive valuations, even as our commodity team doesn’t see upside to Brent from here. We remain OW Miners in particular, looking for further outperformance on top of 25%+ so far ytd. Key metal inventories are rather low, the sector is a clear play on China reopening, weaker USD, and it still looks attractively priced, with very good balance sheets and a prospect of extraordinary capital return. Overall, we believe the EM risk-reward is tactically more positive given the above, but the longer-term outlook remains challenging, and our China economist is looking for a relatively soft 2023 growth outcome.
This podcast was recorded on 21November 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4266987-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Greg joins us to discuss the recent rally in Metals which appears to be fizzling. Factoring good news on China COVID and property policy, and a softer dollar, we assess whether current levels make sense.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Greg Shearer, Head of Metals Research
This podcast was recorded on November 17, 2022.
This communication is provided for information purposes only. Institutional clients can view the related reports at
https://www.jpmm.com/research/content/GPS-426
For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved
Speaker: Mislav Matejka, Head of Global Equity Strategy.
We reiterate our call that equities are helped by the likely peaking out in bond yields and a turn lower in inflation, which will lend support to P/E multiples, as well as allow the Growth style/Tech to stabilize. This goes along with still record negative investor sentiment, light positioning, supportive seasonals into year end, China reopening and the likelihood of smaller than typical earnings contraction. In this note we address what P/E multiples were typically seen at market troughs. Looking at forward consensus P/Es in the past 4-5 recessions, for Eurozone the median was 9x, and the same for the UK - 9.1x. A few weeks ago we were very close to these levels, we touched 10.2x for Eurozone, a point away, and as low as 8.7x for UK, outright below. We do not think that European P/E multiples need to move lower than these levels. For the US, in the past 4 downturns the forward P/E multiples troughed between 10x and 14x, vs the latest reading of 17x, and the low reached in October of 15.6x. This is somewhat higher than the past lows recorded. Having said that, the P/E contraction in SPX so far, from cycle peak to recent low, of 7 points, ranks on par with past recessions. The important consideration for sustainable P/Es will have to be the inflation path. If inflation proves to be much stickier than we think, real yields will need to go higher, pushing P/E multiples lower. Our call remains that inflation will come off, and follow growth lower, as is typically the case. In relative terms, we note that International markets continue to trade at a significant discount to the US. Eurozone forward P/E relative to the US is at 0.67x, lower than what was observed during any of the past 4-5 crises, and even like for like, sector neutral, Eurozone trades at only 0.78x P/E of the US. The clear valuation advantage is one of the reasons why we do not believe Europe, and International stocks more broadly, are an easy short vs the US, even if one expects overall market downside. We started the year looking for regional convergence between International and the US equities, and believe this will continue to work, from here, likely even in USD terms, and not just in lc.
This podcast was recorded on 14 November 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4261272-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
In this episode, we take a closer look at the health of the US consumer and household savings and cash balances. We highlight the risk that US households are reaching an inflection point as consumer confidence is on the decline, while year-ahead inflation remains stubbornly high at 7%. Although US household savings are likely to remain positive through the end of next year, our US economists see that the $2.1trn of excess savings relative to the pre-pandemic trend could be used up by the second half of next year. Excess savings supported US discretionary consumer spending and the JPMorgan Chase Institute finds that elevated cash balances during COVID have provided a cushion for spending and that for all income quartiles, real incomes are higher in 2022 than in 2019. More than two-thirds of respondents in our US equity retail cost of living survey expect to see their monthly core cost of living to rise by at least 10% in the coming months relative to costs of living at the start of the year.
Joyce Chang, Chair of Global Research
Chris Wheat, President of the JPMorgan Chase Institute
Daniel Silver, Senior US Economist
Matthew Boss, Head of J.P. Morgan’s Retail Equity Research
In this episode of All into Account, we discuss the key takeaways from the investor seminar that we hosted at the fall IMF/World Bank meetings, an investor seminar that we have been running for more than three decades. Policymakers sent a clear message that they see further pain still to come as central banks prioritize price stability over other objectives. The conference was also noteworthy for the discussion of the risks posed by financial tightening, which are in many ways trumping economic fundamentals. EM debt restructuring was discussed as a global concern but not a systemic one. Please tune in to hear our other key takeaways.
Speakers Joyce Chang, Chair of Global Research
Jahangir Aziz, Head of EM Economics Research
Jonny Goulden, Head of EM Local Markets and Sovereign Debt Strategy
Luis Oganes, Head of Global Macro Research
Jan Loeys, Head of Long-term Strategy
This podcast was recorded on November 2, 2022.
This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
We believe that equities will be supported by what is still extremely bearish investor sentiment and very light positioning, as well as improving seasonals at this time of the year. Fundamentally, we think that bond yields are likely in the process of peaking. The disinflation phase has already begun, in our view, even as elevated CPI prints continue, and as bond yields keep oscillating around multi-year highs. Inflation remains a lagging indicator of growth, corporate intentions to raise prices have rolled over, as are now peaking intentions to raise wages. Inventories are building, and that should lead to discounting. Out of the four stages of inflation that we see, commodities, goods, services and finally wages, in our view we are currently moving from second to third in terms of stabilization. While the central banks keep tightening at the short end, the long end could begin pricing in an increasing chance of overdoing it, i.e. of a policy misstep. Further, levels of yields should be capped by the weaker activity from here. If that gains traction, it would go a long way in supporting overall equity market multiple. Second, we believe that China offers a potentially positive catalyst in terms of reopening. China sentiment is at rock bottom and any improvement on this front would be notable. Regionally, we stay of the view that UK and Eurozone are not the easy shorts vs the US as most would believe: Eurozone has never traded this cheap vs the US. UK stays our top DM pick. Value was our key OW for the last two years, and we stay positive on Value parts of the market, but a peak in yields suggests Growth style could also stabilize from here. Pure Defensives look the most expensive.
This podcast was recorded on 07 November 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4254314-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Mixo gives us an update on Asian stocks, and in particular Chinese stocks, which have rallied on a rumor that the reopening outlook has improved.
Speakers:
Thomas Salopek
Mixo Das
This podcast was recorded on 31 October 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at:
https://www.jpmm.com/research/content/GPS4229125-0
https://www.jpmm.com/research/content/GPS4246500-0
For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
In the past few weeks we have argued that bond yields have likely started the process of peaking. We believe that the disinflation phase has already begun, and that inflation prints, both the headline and core, will be meaningfully lower in 3-6 months’ time. Stylized, we see four stages to inflationary pressures: first the surge in commodity prices, then the spike in goods, followed by services prices, and finally the wages growth. Commodity prices have fallen back significantly over the summer, both metals, softs as well as energy, to be lower by 20-40%. The European natural gas price has almost fully reversed the summer gains, down 65% from the August highs – we have been calling that natural gas prices are set to fall back due to full storages, and that outages during winter are unlikely. At present it is goods prices inflation that is rolling over. Already the corporate pricing power indicator has come off nicely. Even though services prices are more sticky, we suspect that they too could be rolling over in the next months, which might leave wages growth without a catalyst to keep accelerating. Notably, corporate intentions to raise wages also appear to be peaking, and they lead wage growth. Separately, the COVID-driven dislocations continue easing, as seen in a big improvement in suppliers’ delivery times, bottlenecks in ports having fully cleared and the global freight/container rates that have reversed their spikes. Finally, as economic activity has weakened closer to contraction territory, bond yields are likely to be capped by subdued levels of growth from here. If the view of bond yields peaking gains traction, this would go a long way in helping the equity market to stabilize, with valuation multiples that would then appear more credible. In terms of market leadership, while for the past two years we championed the Value style, potentially peaking bond yields call for a tactical bottoming out in Growth style. We look for a rebound in Growth names such as ASML, ADYEN and SAP, and globally for parts of Tech to trade better, especially now that some of their earnings disappointments are out in the open.
This podcast was recorded on 31 October 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4245929-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
YM joins us to discuss why he’s become incrementally more bullish on EM credit, with spreads at wides and issuance at half what it was in 2021.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Yang-Myung Hong, Head of EM Corporate Strategy
This podcast was recorded on October 25, 2022.
This communication is provided for information purposes only. Institutional clients can view the related reports at
https://www.jpmm.com/research/content/GPS4240524-0 https://www.jpmm.com/research/content/GPS4239112-0
For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved
Phoebe joins us to share her views on breakevens and real yields.
Speakers: Thomas Salopek, Global Cross Asset Strategy Phoebe White, Head of US Inflation Strategy
This podcast was recorded on October 19, 2022.
This communication is provided for information purposes only. Institutional clients can view the related reports at
https://www.jpmm.com/research/content/GPS4221745-0
https://www.jpmm.com/research/content/GPS4232564-0
For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved
Matt joins us to discuss we are turning neutral on investment grade, having been bearish for most of the past year.
Speakers: Thomas Salopek, Global Cross Asset Strategy
Matthew Bailey, European Credit Strategist
This podcast was recorded on October 17, 2022.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS- 4231874-0, and https://www.jpmm.com/research/content/GPS-4232564-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
Q3 reporting season is coming up. While EPS revisions have been incredibly resilient so far, with Eurozone earnings for 2022 net revised up 12% ytd, UK up 33%, and US net flat, earnings are finally likely to see some weakness in Q3, and onwards, as PMIs are in contraction territory. There is a gap now between activity levels and analyst projections. FX makes a big difference regionally, where in Europe weaker currency helps exporters, while the US will see a headwind. We expect continued PMI weakness, driven by our lead indicator, real M1, with a base case of a Eurozone recession starting in Q4, which will result in earnings contraction. We hold -10% EPS growth projection for Europe in 2023. If realized, this would imply a meaningfully milder move in forward EPS by consensus from peak to trough, versus the typical 20-40% drawdown seen in past downturns in key regions. Why could European earnings hold up better than typical in the upcoming recession? 1. Stronger topline growth this time around, and earnings remain nominal variables. 2. Less delinquency risk, and fewer recapitalizations likely, which are typically heavily earnings dilutive. There is no need for a protracted balance sheet recession, or sustained falls in house prices, given that there is not much housing inventory in US or Europe. 3. Geopolitics is a wild card, with a risk of further escalation, but we don’t expect forced shutdowns this winter, as gas storages are full, and more LNG is coming in – Eurozone natural gas prices are now down more than 50% from August highs. We anticipate continued government intervention to shield consumers and industry from the bulk of the energy price spike. 4. FX is a big tailwind for European earnings this time around. Of course, for the US the FX is working negatively, but our economists still don’t have recession as a base case in the US. Notably, the gap has opened up between US and European equity prices and earnings, both in lc and in USD. 5. China has been countercyclical to US & Europe in the last two years, showing significant weakness. For 2023, it could stay countercyclical, but this time become more of a tailwind for growth given the easy hurdle rate, just as Europe is in a recession.
This podcast was recorded on 17 October 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4232065-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
In this episode, we will discuss the impact of higher inflation and interest rates on household finances. The IMF notes that the average global cost of living has risen more in the 18 months since the start of 2021 than it did during the preceding five years combined. Inflation on essentials such as food & fuel has now reached 40% in the UK versus 2019 levels.
Speakers Joyce Chang, Chair of Global Research
Georgina Johanan, European General Retail Equity Research
Chris Wheat, President of the JPMorgan Chase Institute
This podcast was recorded on October 11, 2022.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4213923-0.pdf, https://www.jpmorganchase.com/institute/research/household-income-spending/household-pulse-cash-balances-through-june-2022 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
We do not believe that the positive relative case for large cap UK stocks has changed, despite what was a messy fiscal newsflow in the past few weeks. We upgraded UK to OW last November, after 6 years of our cautious stance. Even accounting for the recent elevated volatility, UK is still outperforming other key DM regions ytd, in local currency, as well as in USD terms. We believe this will continue. The UK interest rate and FX volatility is likely to abate as the government continues to adjust its course. We believe BoE intra-meeting policy moves are not needed, and look for less hikes than is currently implied in money markets. UK equities continue trading at a record discount vs other regions, currently at 8.6x forward P/E. These earnings are likely to be handicapped, but perhaps not by much, given the FX tailwind. The bulk of the FTSE100 earnings base is overseas, at 70%, and Exporters benefit significantly from currency weakness, which will act with a lag. While UK earnings have in the past downturns fallen 20-40% on average, we believe the downside is lower this time around. UK offers the highest dividend yield globally, compared to other DMs, which we believe is well covered this time. Within UK, we held an OW FTSE100 vs FTSE250 pair trade over the past year, and continue to believe this trade should be active. FTSE250 is not trading cheap vs FTSE100, despite recent underperformance, and is still sitting on near record earnings, and on dramatic past long term run. FTSE250 remains more domestically geared. Our economists project that the UK will narrowly avoid a recession, but the pressure on domestic consumption, as well as on the housing market will remain significant, given the spike in mortgage rates. We stay with the call that Exporters look better than Domestic plays. Even though Homebuilders and Retailers have already underperformed meaningfully, we would continue to avoid these, relative to the rest of the market. FX is a negative for them.
This podcast was recorded on 10 October 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4226275-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Tune into our new podcast episode on J.P. Morgan Research’s All into Account channel where we discuss the food security crisis, which brings new challenges as concerns about geopolitics and supply chain security have magnified the fundamental instability across the global food system. The combined forces of Russia’s war on Ukraine, the pandemic and climate change point to recurring food insecurity, which is now impacting 2.3 billion people. The prevalence of severe food insecurity at severe levels has increased by 2.5%-pts since 2019, rising to the equivalent of 207 million more people. Our strategists see structurally higher food inflation and agricultural commodity prices here to stay as fundamental risks remain high. Food export restrictions have surged since the onset of Russia’s war on Ukraine, and agri prices could rise another 10-20% over the course of 2023, while fertilizer prices will remain elevated into next year. We recommend staying long the agri complex and investing in food producers that are adapting, and we favor food producers that can sustainably grow revenues at a faster pace than industry average.
Speakers:
Joyce Chang
Tracey Allen,
Nora Szentivanyi
Ken Goldman
Celine Pannuti
This podcast was recorded on September 30. 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/ https://www.jpmm.com/research/content/GPS-4210680-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Natasha joins us to discuss her views on oil in the wake of the recent OPEC cut. We cover the key factors impacting her price targets.
Speakers: Thomas Salopek, Global Cross Asset Strategy
Natasha Kaneva, Global Commodities Research
This podcast was recorded on 6 October 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4224965-0, https://www.jpmm.com/research/content/GPS-4223305-0, https://www.jpmm.com/research/content/GPS-4220388-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
We argued last week that bonds are likely becoming oversold, as Fed and inflation sentiment have moved to extremes. We believe that we are already starting a disinflation phase, as inflation remains a lagging indicator of growth. More concrete signs of peaking inflation, as well as of the peaking inflation expectations, and finally the weakness in activity all suggest bond yields should be capped going forward. Earnings have been very resilient, but are likely to finally show a rollover in Q3. Here, we think that the activity reset is what investors need to see in order to start looking through. Also, recession is our base case, but earnings could hold up much better this time around than during past downturns. Eurozone gas prices likely have two way risk from here, not just the upside risk. JPM assessment remains that there will not be a need for outages. Sentiment metrics are at record lows, and positioning appears very light. Seasonals turn much more favourable in Oct-Dec period. While Value was our key OW entering the year, we called last week for a renewed tactical bounce in Growth style, and Tech in particular, to be aided by potentially peaking bond yields. Regionally, UK remains a OW, given extreme valuation discount, as well as a tailwind for exporters from weak FX. We keep pair trade of OW FTSE100 vs FTSE250.
This podcast was recorded on 03 October 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4220113-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speakers: Thomas Salopek, Global Head of Cross Asset Strategy
Francis Diamond, Head of UK Rates Strategy
Meera Chandan, Head of Global FX Strategy
The markets had a strong reaction to the UK’s unfunded fiscal stimulus, producing outsized moves in UK rates and the pound. Given the volatility, we discuss the potential reactions from the government and the BoE to restore confidence, as well as our views on how to position.
This podcast was recorded on 28 September 2022. This communication is provided for information purposes only. Institutional clients can view the related reports at : www.jpmm.com/research/content/GPS-4215583-0, and www.jpmm.com/research/content/GPS-4214409-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Russia’s war on Ukraine appears to be at a turning point as Putin’s strategy has shifted with his partial mobilization announcement on September 20 in which he calls up 300,000 reservists with an explicit mention of nuclear options. So what lies ahead? We are pleased to feature Ambassador Daniel Fried, Weiser Family Distinguished Fellow and former US Ambassador to Poland, who is a 40-year US Foreign Service diplomat who crafted US sanctions against Russia and also helped craft the policy of NATO enlargement to Central European nations and is joined by Natasha Kaneva, Head of J.P. Morgan’s Commodity Strategy, and Jan Loeys, Head of Long-term Strategy, who is part of our Strategic Research team. For background on these topics, see our earlier investor webinar, Back to School Essentials, September 17, 2022.
Note that the guest expert views presented do not necessarily coincide with those of the J.P. Morgan’s Global Research franchise.
Speakers:
Joyce Chang, Chair of Global Research
Jan Loeys, Head of Long-term Strategy
Natasha Kaneva, Head of Global Commodities Strategy
This podcast was recorded on September 26, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4206335-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
The market has now settled into a view that Fed will continue with outsized hikes for the foreseeable future. What a difference to only a year ago when almost no hikes were priced in. So, will the next 6-9 months be like the last 6-9 months? Will the Fed deliver on what is currently priced in, and more fundamentally, do they need to deliver on this in order to achieve their inflation objective? So far this year, there was no other problem to focus on bar inflation, as payrolls were exceptionally strong every single month, averaging ~400k ytd. In a sense, it was “easy” for the Fed to maintain a hawkish message, as the collateral damage was not yet visible. Next 6-9 months are likely to look quite different. For one, US composite PMI is at 49, in contraction territory. A number of corporates are warning on earnings outlook. Inflation will show more and more visible signs of a peak and a move lower. PPIs are down, pointing to softer prints, as are pretty much all commodity prices. Many inflation outlook metrics are also showing some softening. Inflation expectations within consumer confidence surveys have turned lower of late. Inflation forwards are also lower most recently. There is more evidence of inventory overhang, and discounting, as well as of downtrading in corporate results. Corporate pricing intentions have clearly turned lower. After all, inflation has always been a lagging indicator of growth. Finally, Fed is not starting this next phase from a zero level, and desperately behind the curve, but from 3.25%. This could act to limit further moves up in long yields, which look oversold right now. We note that the gap between PMIs and yields is these days at the other extreme. In the last 1.5 months Value style outperformed again, with top sectors Banks, Insurance and commodities. We have entered the year-long Financials and OW both Mining and Energy, and stay so from the fundamental perspective, especially OW Banks&Insurance given likely strong earnings trends and a limited delinquencies risk. Now that Growth, and Tech, have traded back down though, there could be an opportunity for another tactical bounce in Growth, similar to what we have seen in the summer.
This podcast was recorded on 26 September 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4214271-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Valuation, positioning and sentiment for European and UK are at extreme lows, even as some of the near-term tail risks have moderated, thanks to energy subsidies and natural gas showing possible downside risk.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Mislav Matejka, Head of Global Equity Strategy
This podcast was recorded on September 23, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4208774-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker: Mislav Matejka, Head of Global Equity Strategy.
Over past weeks, we have fielded numerous calls by global/US investors, who are bearish on Europe, with one of the key questions being: why is Europe not lagging much more relative to the US? Reports of much more significant size of short positions in Europe than in other regions are frequent in the media, as well as of the biggest UW on the region ever, vs global benchmark. In light of all of this, it is interesting to note that in local FX SXXP ytd is down 16%, vs SPX down 18%. So, is Europe a clear short? Our base case is for a Eurozone recession, but we do not think that Europe offers only downside, as: 1) Our view remains that natural gas prices will move lower, given the good progress on refilling of storages, new LNG coming in, as well as already reduced consumption, and therefore that forced shutdowns are unlikely. 2) Eurozone is historically high beta on the way down, partly as Banks and periphery would act as a weak link. This time around, Eurozone Banks are well capitalized, and peripheral spreads are not expected to have a disorderly widening, courtesy of the ECB backstop. 3) Earnings could be acting better than typically, and a potential recession might be shallow, given resilient house prices and an EU labour market that has never been this strong. 4) Fiscal impulse is expected to be bigger in Europe than elsewhere. 5) ECB is expected to be less aggressive than the Fed. 6) P/E discount of Eurozone to the US has never been as large as it is currently, with very light positioning. From the broad market perspective, last week’s CPI print was disappointing, but we don’t think the call of inflation peaking, and consequently of the Fed likely becoming more balanced post the September hike, is off. PPIs are down, and compared to what is currently priced in futures, the Fed is unlikely to get more hawkish.
This podcast was recorded on 20 September 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4208774-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Tohru-san joins us to discuss Japanese markets ahead of the BoJ meeting. We discuss the target for USD/JPY and whether we can expect currency intervention. Speakers: Tohru Sasaki Thomas Salopek
This podcast was recorded on Sep 16, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4206945-0
for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speaker:
Mislav Matejka, Head of Global Equity Strategy
This podcast was recorded on Sep 12, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4203093-0
for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Fabio Bassi, International Rates Strategist
This podcast was recorded on Sep 9, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4203506-0
for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Saad joins us to discuss why we’ve become more bullish on EM Fixed Income, recently upgrading EM local duration from UW to MW.
This podcast was recorded on August 19, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at
https://www.jpmm.com/research/content/GPS-4177028-0
for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Eric joins us to discuss his latest credit market views given the recent rally.
This podcast was recorded on August 16, 2022.
This communication is provided for information purposes only. Institutional clients can view the related reports at
https://www.jpmm.com/research/content/GPS-4177276-0
https://www.jpmm.com/research/content/GPS-4178944-0
for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
During an insightful discussion with the Congressional Budget Office (CBO), J.P. Morgan Research contemplated the implications for the fiscal and debt trajectory from the CBO’s recently released long-term budget projections that extend through 2052. The current size of the primary deficit in the US is 2.3% of GDP and projected to rise to 3.9% in 2052, mainly due to demographics and mandatory outlays for healthcare and social security, raising concerns that the fiscal trajectory is unsustainable.
Joyce Chang, Chair of Global Research, is joined by Michael Feroli, Chief US Economist and Jan Loeys, Head of Long-term Strategy, to discuss the fiscal outlook.
Speakers:
Joyce Chang, Chair of Global Research
Jan Loeys, Head of Long-term Strategy
Michael Feroli, Chief US Economist
This podcast was recorded on August 9, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4167923-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Bram joins us to discuss what vol markets are telling us about the earnings season and also to discuss his Global ETF Handbook.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Bram Kaplan, Equity Derivatives Research
This podcast was recorded on August 2, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4152075-0 and https://www.jpmm.com/research/content/GPS-4124769-0.pdf for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Shikha walks us through different scenarios for global Natural Gas prices in light of recent developments with Nordstream.
Speakers:
Thomas Salopek, Global Cross Asset Strategy
Shikha Chaturvedi, Global Natural Gas Strategy
This podcast was recorded on July 29, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4160856-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Christyan shares his latest views on the Energy Sector, in particular oil supply & demand assumptions and current valuations.
Speakers: Thomas Salopek, Global Cross Asset Strategy
Christyan Malek, European Oil & Gas
This podcast was recorded on July 28, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4154767-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Phoebe joins Tom to share her latest views on the CPI, TIPS breakevens, and real yields.
Speakers:
Thomas Salopek
Phoebe White
This podcast was recorded on July 21, 2022.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4148175-0, www.jpmm.com/research/content/GPS-4148051-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.
Welcome to All Into Account, a thematic cross-asset markets podcast led by Thomas Salopek, Head of Cross-Asset Strategy & Samantha Azzarello, Head of Content Strategy and Curation.
This communication is provided for information purposes only. Please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.