JPMorgan Chase has just released a Market Update, warning that sentiment and macroeconomics data does not support sustained stock recovery.
Mislav Matejka is the global equity strategist at JPMorgan. He says that investors are overly optimistic about US equities despite trade uncertainties and elevated risks of recession.
JPMorgan increased the odds that a recession would occur globally from 40% to 60% last month in response to President Trump’s ongoing trade war.
Matejka claims that unlike the past, US stock markets are not a good place to “hide in” when an economic recession occurs.
Matejka’s bearish view on the S&P 500 is supported by his assertion that US stocks are overvalued, with a 21x multiple of forward earnings. Growth expectations are also too high for an eventual recession to be considered. Matejka warns that the Fed will likely hold rates constant despite rising inflation expectations and signs of a deteriorating economy.
The billionaire Paul Tudor Jones seems to be echoing JPMorgan. Tudor Jones warned in a recent CNBC interview that Trump’s trade tariffs, coupled with a Fed which is hawkish, could push the stock market down to its low point of 4,835 for 2025.
For me, the answer is pretty obvious. Trump is locked into tariffs. The Fed is also locked into not cutting interest rates. This is not good news for the stock markets. It’s likely that we will reach new lows…
Taxes are increasing, the biggest since [1960s]. You can cut 2 to 3 percent off the growth, and then there’s the Fed, who, unless it gets really dovish, and cuts really hard, will probably take you to new lows. The hard data that follows will likely cause the Fed and Trump to act, and we will see a rally following .”
The S&P 500 was trading at $5,659.
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The post JPMorgan warns US stocks ‘not a good place to hide’ as Paul Tudor Jones braces for fresh market lows could be updated in response to new developments.
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