RE: JPMorgan Turns Bearish,6 Jul 2020 19:50
It may come as a surprise to some, but just two weeks after JPMorgan said it was turning bullish on the US, officially upgrading US equities to Overweight after holding a missing the biggest equity rally in decades with a Neutral rating on US stocks, the bank appears to have had a change in heart, and overnight the bank's chief equity strategist Mislav Matejka writes that looking ahead, much of his newly found optimism has vaporized and as a result, "risk-reward is unattractive for equities in 2H of 2020" and stocks are likely to lag bonds and cash again, as they did in 1H ‘20.
In laying the groundwork for his bearish reversal, the JPM strategist writes that unlike in 2019, when stocks performed exceptionally well, with MSCI World up almost 30% for the year - a move that was due entirely to multiple expansion as global earnings growth was in fact negative in 2019 due to the protracted US-China trade war - in 1H of 2020 equities lagged both bonds and cash, and looking ahead, Matejka expects stocks to again lag bonds and cash again as they did in 1H ‘20 (he may well be right, but the JPMorganite may have picked a less euphoric day than today to unveil his bearish outlook, considering the vertical move in stocks and especially the Nasdaq; just take a hint from co-worker Marko who always publishes bullish notes only on S&P upticks).
https://www.zerohedge.com/markets/jpmorgan-turns-bearish-sees-unattractive-risk-reward-stocks-h2