All into Account

All into Account: ‘Cross Asset Systematic Strategies’, with Dobromir Tzotchev, Fred Giertz, Ralph Sueppel

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.

Equity Strategy - Q3 preview: bottom-up to start looking more challenging; OW bond proxies and commodities into year end

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.

All into Account: Cost of living pressures reaching an inflection point?

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.
Speakers
Joyce 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.

All into Account: ‘Update on the Chinese economy & Chinese equities’ with Grace Ng, Senior China Economist, and Wendy Liu, Chief Asia and China Equity Strategist

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.

Where Are We in the Great Repricing?

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.
Speakers
Joyce 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.

Equity Strategy - Time is coming to position for the long duration trade

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.
 

All into Account: ‘State of the pullback in Credit and Equities’ with Steve Dulake, Head of Spread Product Research, and Bram Kaplan, Head of Americas Derivative Strategy

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.

All into Account: Debt, default, devaluation: Implications for China’s financial markets

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.
 

Equity Strategy: October Chartbook

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.

All into Account: ‘Impact of “High for Long” on our Cross Asset views’ with Fabio Bassi, Prabhav Bhadani, and Patrick Locke

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.