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JP Morgan Guide to the Markets for 4Q 2017 Released

Posted by WrapManager's Investment Policy Committee

October 12, 2017

JP Morgan Reviews Investing Opportunities & Rate Expectations

JP Morgan’s Guide to the Markets for fourth quarter 2017 is now available. This comprehensive, 60+ page guide includes insightful charts illustrating:

  • Corporate profits and financials
  • Fixed income sector returns
  • Local investing and global opportunities
  • Federal funds rate expectations
[+] Read More

JPMorgan Asset Management JP Morgan market perspective JP Morgan Guide to Markets Money Manager Commentary

JP Morgan Assesses Future Asset Allocation

October 5, 2017
Given our positive view on growth, we maintain a pro-risk tilt in our asset allocation. As the U.S. economy moves into late cycle, we are naturally more attuned to any dip in higher frequency data, but currently we see little risk of recession in the next 12 months. As a result, we remain overweight (OW) stock-bond and underweight (UW) duration—albeit with slightly lower conviction in light of the failure of inflation expectations to advance alongside other macro data. Correlation across regional indices remains low, favoring broad diversification across global equity markets. But at the margin our most favored regions remain the eurozone and Japan, ahead of the U.S. and emerging markets, with the UK our least preferred region. In bond markets we expect yields to grind higher over the fourth quarter and see U.S. Treasuries outperforming most other sovereign markets, in particular German Bunds, which look vulnerable given the robust level of eurozone growth. Elsewhere we remain neutral on credit, real estate and commodities, and UW cash. In a distinctly mature credit cycle, returns from credit will come from carry rather than capital appreciation; nevertheless, we expect credit to outperform government bonds even if it lags stocks. Overall, we take a pro-risk stance in our portfolios but are mindful that with the economic cycle maturing, liquidity and diversification are paramount. Read the entire market commentary here. [+] Read More

Geneva Reviews Fixed Income and Dividend Investing

July 27, 2017
"Dividend‐ growth stocks remain more attractive than most high‐dividend‐yield stocks..." Investor and consumer confidence remained optimistic in the second quarter as capital markets continued an upward advance and volatility remained dampened. The global economy continued to gain momentum as all the world’s largest economies showed signs of growth while the U.S. consumer remained in good shape. Despite an encouraging backdrop there are some areas that continue to struggle such as traditional retail and energy, which we will continue to monitor as we construct our portfolios. [+] Read More

Main Management Reviews Market Performance in 2Q 2017

July 20, 2017
"Some Highs Despite Low and Slow Economy..." The second quarter of 2017 saw markets make new highs despite lackluster economic data. The Trump administration has seen strong market performance but has been unable to get two of its main goals coming into the inauguration – healthcare and tax reform – off the ground. This lack of action caused some hesitation in the markets, and when coupled with uninspiring economic data, has resulted in a more uncertain outlook heading into the second half of the year. [+] Read More

JP Morgan Evaluates Implications of an Interest Rate Hike

June 15, 2017
After a brutal recession and a painfully slow recovery, the U.S. economy no longer needs emergency measures of support from the U.S. Federal Reserve. Policymakers began the process of normalizing monetary policy at the end of 2015, and although the Fed is raising rates because the economy is healthier, the prospect of higher interest rates has created consternation and angst among some investors. While the Fed’s own projections are for a slow and gradual rate hike cycle, futures pricing suggests that the market thinks interetst rate hikes may be a bit slower. Although the gap between the Fed’s projections and the market’s view has narrowed, there is still room for surprises and volatility. The key thing to watch will be how market expectations adjust to the Fed’s new forecasts, as a Fed that hikes more quickly than the market expects could lead to upward pressure on the U.S. dollar and a de facto tightening for the U.S. economy. Read the entire commentary here. [+] Read More

JP Morgan Considers Inflation's Next Phase

May 18, 2017
Around the globe, a synchronized upturn in nominal growth is underway, including an upturn in inflation. Global monetary policy is responding in kind. The Federal Reserve (Fed) is increasingly confident that inflation will hit its target rate and has begun accelerating its cautious rate-tightening cycle; the pendulum is gradually swinging toward tightening at other developed market (DM) central banks. The investing community’s perception of inflation risk has swung during the current expansion from fear of an inflationary surge after the Great Recession to fear of global deflation when oil prices collapsed and, since last year, back to a reflation theme, again accompanied by worries that some economies, particularly the U.S., could overshoot their central banks’ targets. By contrast, throughout these periods, inflation itself (at least excluding volatile energy and food prices) has displayed surprising stability. How far will reflation go in the U.S. and other developed market economies? How can we forecast inflation? Read the entire market commentary here. [+] Read More

JP Morgan Shares Their Guide to the Markets for 2Q 2017

May 11, 2017
JP Morgan Quarterly Guide to the Markets JP Morgan’s Guide to the Markets for the second quarter of 2017 is now available. The comprehensive guide includes pages of charts illustrating: Returns and valuations by style and by sector Fixed income yields and returns Annual returns and intra-year declines of the S&P 500 [+] Read More

Brandes Reviews the Q2 2017 Opportunities in International Equities

May 4, 2017
Is your portfolio well-positioned to take advantage of international opportunities? Brandes Investment Partners believes there are compelling reasons why now is the time to cast a longer look at international equities. Including: Access to more opportunities Diversification potential Return reversion potential [+] Read More

JP Morgan Sees Potential in Europe, Emerging Markets

April 27, 2017
In the first quarter of 2016, investors feared that weak conditions in many emerging markets, commodities and global manufacturing would deteriorate into a full blown recession across the developed world and China. As stock markets struggled, equity investors overwhelmingly preferred defensive stocks and gave an unusually generous discount to companies vulnerable to weak economic activity and low interest rates. But the recession never arrived. Reduced fiscal austerity and continued easy monetary policy, coupled with greater confidence in the industrial sector and increased bank lending, have reignited global growth. Commodity prices have rallied, and the outlook for corporate profits now appears better than it has in several years. Though equity markets have moved quickly to price in the welcomed shift, we still see opportunities, especially outside the U.S., after many years of substantial returns for the S&P 500. Read the entire market commentary here. [+] Read More

JP Morgan: The Importance of Immigration

March 14, 2017
In the early days of the new administration, no issue has been more controversial than immigration. The president’s statements on building a wall on the U.S.'s southern border, his actions on banning travel from specific countries and his heightened focus on deporting illegal aliens have generated a negative response from his opponents and a positive reaction from some of his supporters. As with our entire 100 days of change series, we will try to steer clear of political arguments. Policies in this area do have significant implications for both the economy and, ultimately, financial markets. So what actions has the president taken and advocated, how might these affect both illegal and legal immigration and what could this mean for growth, inflation and investment returns? Read the entire market commentary here. [+] Read More