JP Morgan (JPM) Gives Its Views On Equities, Fixed Income And More
November 20, 2009 8:37 AM
With the economy coming back on track, asset reflation and risk compression have become more important forces for the equity markets. After seeing the lows, hedge funds and mutual funds have been increasing their flow into equity trades. Retail investors who were parking their money into bonds have also slowly started investing in equity funds.
In equities, JPMorgan (NYSE: JPM) expects short dollar/long beta trade performing well. In equities JPMorgan expects asset reflation to favor the high-risk, high-beta names. Within the beta trade, they expect energy and technology to outperform. JP Morgan’s outlook for European credit in 2010 is to stay overweight on financials that are focusing on Lower Tier II, Tier I issued in 2009, and distressed financials within HY. In forex JPM is advising shorting USD medium term and focusing on cross rates where interest rate markets looked mis-priced. Their view is to also short oil and long base metals and agricultural products.
