All into Account

Equity Strategy : From one extreme to another; Good entry point to look for a renewed tactical bounce in Growth

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.

All into Account: ‘Assessing the balance of risks for European Equities’ with Mislav Matejka, Head of Global Equity Strategy

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.

Equity Strategy: Is Europe really only offering downside vs global? Countering the widespread bearishness on the region

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.

All into Account: ‘Views on Japan ahead of the BoJ meeting’ with Tohru Sasaki, Head of Japan Markets Research

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.

Equity Strategy: Look for continued steps by governments to ease the gas hit; Earnings keep defying economic momentum

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.

All into Account: ‘Frontloading: the only game in town for DM central banks’ with Fabio Bassi, Head of International Rates Strategy

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.

All into Account: Catching up with Saad Siddiqui, Emerging Markets Strategist

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.

All into Account: Catching up with Eric Beinstein, Head of US Credit Strategy

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.

All into Account: US fiscal outlook unsustainable, under any metric

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.
 

All into Account: Catching up with Bram Kaplan, Head of Americas Equity Derivatives Research

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.