Investing.com – JPMorgan analysts said they remain bearish on stocks and see little incentive to change their stance amid high valuations, restrictive interest rates and persistent inflation.
But JPM analysts said they maintained an overweight stance on commodities and cash as supply disruptions and improving demand could lead to higher prices for a range of commodities.
The brokerage said that while its negative stance on stocks has hurt the performance of its multi-asset portfolio over the past year, it still sees no reason to be bullish on the stock.
Higher interest rates, volatile inflation numbers, strengthening investor positioning and valuations, and geopolitical uncertainty kept sentiment in the brokerage industry largely negative on equities.
“We don’t think niche themes like AI chips can offset all of the traditional market issues that have historically plagued cyclicals,” JPM analysts wrote in a note.
US stock indices have recently hit record highs, driven mainly by growth in technology and the growing hype around artificial intelligence. This trading has spread to global stock markets, leading to higher valuations in EMEA and Asia.
However, on the equity side, JPM analysts said they prefer Japan and China to the US as Japan will benefit from rising inflation and interest rate hikes by the Bank of Japan, while China’s equity rally will receive more support from stimulus measures and relative growth interest rates. cheap estimates.
In commodities, JPM analysts said they expect oil prices to improve during the travel-heavy summer season, while weather risks for sugar and grains intensify, pointing to potential price gains.
Copper, which posted a stellar rally last week, can expect some near-term consolidation given that its recent rise to record highs was driven primarily by a speculative frenzy rather than physical market conditions. But JPM analysts said they still maintain a “medium-term bullish” view on prices.