According to Bloomberg News, after upheavals from the beginning of the year, the risks global stocks face have priced in, as per JPMorgan Chase & Co.’s Mislav Matejka. The strategist led by Mislav believes that neither European Bank nor Federal Reserve will move into hawkish waters, given the price in the situation prevailing. However, headline inflation is seen to be surging, and it is also being anticipated that the earnings will give a positive surprise. The team also said they believe equities still offer upside, and the cycle’s end is a far cry.
European and US stocks started the year on a slow trail amidst fears that the monetary tightening might get severe and aggressive, which is supposed to alleviate inflation. It will likely lead to a slowdown in the economy’s growth.
While an excellent earnings season supports alleviating concerns over an economic backdrop that is less forgiving, the equity markets are volatile, and as far as the opinion of strategists is concerned, they are now divided about the economic growth for the months remaining this year.
In comparison to the same, chief US strategist of Morgan Stanley US, Michael Wilson, said that for the stocks, winter is already set in for the stocks. Bloomberg News, that while Wilson is recommending that investors must position and defend themselves for the more significant downside, strategists at JPMorgan say that investors must adopt a strategy that is opposite to the same, exercising an underweight position in sectors that are traditionally defensive like real estate, health care, and consumer staples stocks.
