This is a note published by the bank’s chief economist Michael Feroli explaining JPM’s top 10 takeaways in response to client questions “Where are markets headed as bond yields rise?” – Image Via ZeroHedge
My view on the “key takeaways” shared by our good friends at JP Morgan:
According to JPM are supposed to expect “the strongest performance since the early 1980’s,” an S&P target of 4,000 in the next few weeks, 4,400 later this year, and COVID 19 recovery strength in consumer discretionary. During the same time time preparing for “longer term damage from the pandemic similar to the Global Financial Crisis,” and base metal inventories much leaner than normal following a recession. Add to that ignoring the treasury sell off from last week because it was just “compromised market microstructure and fragile liquidity,” no big deal.
So…which one is it? A booming economy the likes of which we haven’t seen in 40 years (as if the previous 11 months wasn’t amazing enough), or a slowdown of potential growth for the NEXT DECADE! Ask yourself, “Why are base metal inventories currently leaner than usual “AFTER a recession?” The reason is hidden in the exact same release above. The recession isn’t over. We have to look forward to a decade of low potential growth. By the way, JPM is OVERWEIGHT commodities, especially gold, silver, etc.
There have been a lot of bears coming out of the woodwork lately, but it should be noted that S&P 4,000 and 4,400 are not unrealistic upside targets, 4k is just a stone’s throw away. COVID reopening plays would provide a giant confidence boost especially for the retail market. By the way, Texas and Mississippi announced on Tuesday the plan to lift mask mandates and allow all businesses to open at 100% capacity. The dollar index has found a bottom for now as it bounces in a holding pattern awaiting the new round of stimulus (March 14 says JPM). I guess the moral of the story is enjoy it while it lasts. and load up on physical gold and silver now before the reality of the demand vs supply imbalance starts to reflect in the price.