JPMorgan moderately positive on US outlook
Lucia Gutierrez Melado, director of strategy for Spain and Portugal at JPMorgan AM, sees a scenario of moderate but positive growth in developed economies, driven by robust labor and consumer markets. A recession is unlikely in the other half of the year.
The company’s market outlook and strategy presentation beat Gutierrez Melado’s forecast of a 5.25% to 5.5% rate hike by the US Federal Reserve, despite only two hikes by government commissioners. clarifying. The European Central Bank (ECB) is expected to raise interest rates twice from 0.25% to 4.5%. Both central banks will keep interest rates high for longer than expected to fight inflation. The German-influenced tech recession in the eurozone is seen as temporary, with a strong labor market and corporate profits leading to a recovery. A similar trend is expected in the United States, and the impact of the regional bank crisis is attracting attention.
Gutierrez Melado predicts future regulatory collaboration between large and regional banks in the wake of regional crises. Low family leverage in the US is seen as an advantage in weathering monetary tightening. While US inflation is improving, European levels remain high, influenced by demand for services.
JP Morgan’s stance is becoming more positive, It includes minor changes such as increased stock allocations. Bonds remain a favourite, with bond quality rising as the likelihood of a recession diminishes. In the stock market, revisions to earnings expectations are in line with expectations of a slowing economy. Adjustments include giving more weight to Japan and the UK.
