JPMorgan Chase has just issued a market update, warning sentiment and macroeconomic data do not support any sustainable recovery for shares.
MAGAV Matejka, the head of the global and European stock strategy at JPMorgan, says that investors seem to be bullish about US shares despite increased recession risks and commercial insecurity, report Investing.com.
Last month, JPMorgan increased the chance of a worldwide recession from 40% to 60% in the midst of President Trump’s trade war.
Matejka says that, unlike in the past, US shares are no longer a “good place to hide” during an economic decline.
“The actual recession could still be avoided, but if someone came through, the views of many could be that it is already too optimistic in the price.”
Matejka supports his bearish attitude on the S&P 500 by pointing out that US shares are expensive, act with 21x forward income, while the growth meter expectations are too high to take into account a potential recession. He also warns that the FED is ready to keep the interest rates stable in the midst of increasing inflation expectations, even if the economy shows signs of cracking.
Billionaire Paul Tudor Jones seems to echo the prospects of JPMorgan. In a new CNBC interview, Tudor Jones warns that Trump’s rates and a ragged Fed can drag the stock market below the lowest point in 2025 of 4,835 points.
“It is pretty clear to me. You have Trump that is locked up at rates. You have the Fed that is locked up with not lowering rates. That is not good for the stock market. We will probably go to new lows …
There are taxes, such as the largest tax increase since the [1960s]. So you can take a 2 to 3% discount on growth and then you have the Fed that is, unless they are really Dovish and really, really cut, you probably go to new lows. And when we are at new lows, the hard data will start to follow and they will probably create the Fed to move, create Trump to move and then we get a kind of rally afterwards. “
From the end of Friday, the S&P 500 acts at 5,659.
https://www.youtube.com/watch?v=c7gtvdBTZRO
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