All into Account

Thought leaders from J.P. Morgan Global Research discuss cross asset investing and highlight key trends impacting financial markets.

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Episodes

Monday Jan 22, 2024

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 StrategyEric 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.
 
 

Monday Jan 22, 2024

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.

Monday Jan 15, 2024

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.

Wednesday Jan 10, 2024

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.

Monday Jan 08, 2024

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.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4596811-0 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.

Monday Dec 18, 2023

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.
 
 

Monday Dec 04, 2023

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.
 

Monday Dec 04, 2023

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.

Wednesday Nov 29, 2023

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.

Tuesday Nov 28, 2023

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.

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