All into Account

All into Account: Practitioners’ views on QIS investments

‘Practitioners’ views on QIS investments’ with Dobromir Tzotchev, Head of Cross Asset Systematic Research, Deepak Maharaj, QIS Product Development, and Paul Fraynt, Portfolio Manager, Franklin Templeton.
 
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Dobromir Tzotchev, Head of Cross Asset Systematic Research
Deepak Maharaj, QIS Product Development
Paul Fraynt, Portfolio Manager, Franklin Templeton
 
This podcast was recorded on October 24, 2023.
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-3295004-0  https://www.jpmm.com/research/content/GPS-4527762-0 and https://www.jpmm.com/research/content/GPS-4540030-0  For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

Equity Strategy: USD strength - equity implications; The barbell of Defensives and Energy remain our key preferences

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
 
In addition to the move up in energy prices and elevated bond yields, renewed USD strength is another factor that the equity market needs to digest. Last October, USD peak coincided with the equity trough, and the more mixed equity performance in the past few months is coinciding with USD bottoming. Almost always in the past, when USD is strengthening, global equities have been under pressure. Our FX team is bullish on the USD over the next 3-6 months, vs all major crosses. If that comes to pass, equities in general could stay under pressure. Regionally, a stronger USD has typically meant the outperformance of Japan, Switzerland and the UK, in local currency, given their large export exposures. When assessing the performances in common currency, US equities are the top performers in times of USD strength, even with a headwind to the exporters, and Japan stays the outperformer, in the regional context. EM is an underperformer, and it is Eurozone that moves to the bottom of the pecking order. EM are lagging DM this year by 10%+, and from our equity strategy perspective, we remain cautious on EM. Broadly, in terms of sector tilts, we continue advising a barbell of commodities – OW Energy – together with a low beta exposure, such as Staples and Utilities, and that could track even if bond yields keep going higher in the near term. European Healthcare could be interesting, as well, as it tended to work well with a strong USD. Thematically, we maintain our longstanding preference for FTSE100 over FTSE250 that we initiated in November ’21. In terms of equity market levels, our index target of 4150 for SX5E has not changed over the last 12 months, since it was initiated. Stocks are at present below it, but we expect continued undershooting of the targets in the near term.
This podcast was recorded on 22 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-4540044-0  for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

All into Account: ‘APAC 2H23 Nuclear Outlook’ with Alan Hon, Tomohiko Sano, SM Kim, Sanjay Mookim, and Hannah Lee

Nuclear is making a global comeback, and we see accelerating developments across the APAC region as nuclear plays role in de-carbonization. Since early 2022, at least 14 countries have approved new nuclear units or announced supportive policies. This echoes IEA’s earlier forecast that nuclear power capacity will need to double in size in the next two decades for the world to meet net-zero. We expect this trend to be particularly pronounced in Asia.
Speakers:
Thomas Salopek, Head of Global Cross Asset Strategy
Alan Hon, Head of Asia Power, Utilities and Renewables Research
Tomohiko Sano, Co-Head of Japan Equity Research and Head of Japan ESG & Sustainability and Machinery Research
SM Kim, Korean Autos Analyst
Sanjay Mookim, Head of India Research and India Equity Strategist
Hannah Lee, Head of Asia ESG Equity Research
This podcast was recorded on 20 October 2023.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4527125-0, www.jpmm.com/research/content/GPS-4531807-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

All Into Account: A Public Call About Private Credit

Speakers: 
Jake Pollack, J.P. Morgan’s Global Head of Credit Financing
Stephen Dulake, J.P. Morgan’s Global Head of Credit, Securitized Products and Public Finance Research
 
This podcast was recorded on 19 October 2023.
This communication is provided for information purposes only. Institutional clients visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

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.