In the latest update, JPMorgan Chase, in all its glory, warns that the current sentiment and economic data are decidedly unsupportive of a sustained recovery in the stock market. Yes, folks, that means your beloved equities might not be the fortress of safety you think they are. Sorry, no place to hide in this storm.
Mislav Matejka, the so-called oracle of global and European equity strategy at JPMorgan, points out that investors seem to be overly optimistic about US equities, even as recession risks soar and trade tensions hover like an uninvited guest at a dinner party. Reports from Investing.com confirm this rather uncomfortable fact.
Just last month, JPMorgan decided to raise the likelihood of a global recession from a modest 40% to a much spicier 60%, all thanks to President Trump’s ongoing trade wars. Isn’t that delightful?
Matejka’s sentiment seems to suggest that US stocks, in the current climate, are not quite the “safe haven” they once were during economic downturns. Nope, not this time, folks.
“The recession might still be avoided, but if it does arrive, the idea that it’s already priced in might be just a tad too optimistic,” he remarks, making it sound like your grand plans for a vacation might be derailed by unforeseen circumstances. Tough luck!
Backing up his gloomy predictions, Matejka points out that US equities are quite overpriced, trading at 21 times forward earnings, while growth expectations are ridiculously high for a potential recession. Oh, and let’s not forget that the Federal Reserve is poised to keep interest rates firmly planted where they are, even as inflation expectations grow. What a party!
Meanwhile, billionaire Paul Tudor Jones, perhaps thinking of his own personal market strategy, echoes JPMorgan’s less-than-rosy outlook. In a recent interview with CNBC, Jones warns that Trump’s tariffs and the Fed’s hawkish stance could send the stock market to fresh new lows, well below its current low of 4,835 points. Because why not?
“For me, it’s pretty clear. You’ve got Trump who’s sticking to tariffs, and the Fed who’s sticking to their no-rate-cut policy. That’s definitely not good for the stock market. We’re probably heading to new lows…” he explains, sounding eerily confident, as if he already has a crystal ball. He goes on to mention taxes and the largest tax increase since the 1960s, which may well slice 2 to 3% off growth. So, things are looking just a touch grim, aren’t they?
“And when we hit those new lows, the hard data will eventually catch up, and the Fed will have to move, Trump will have to move, and then we’ll get some kind of rally after.” Well, that’s reassuring… maybe? It sounds a little like “we’ll hit rock bottom, but don’t worry, we’ll bounce back eventually.”
As of Friday’s close, the S&P 500 stands at a rather unimpressive 5,659. Not quite the numbers you’d want to see if you’re holding out for a “good year.”
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2025-05-10 23:51