1102 days ago • Posted by Charles-Henry Monchau
JP Morgan Cross-asset views: the 5 pillars
1) global growth is set to boom, even if unevenly across regions
(2) every major asset class but EM Currencies and Commodities is expensive on a range of short and long-term valuation models, but even expensive markets drift higher when monetary policy is loose and growth is above trend
(3) the bond bear market could continue for years, but it is unlikely to disrupt Equities and Credit beyond intra-quarter drawdown, when real rates are still low enough to deliver a growth boom
(4) EM outperformance during this bear market will be more tactical
(5) the chief systemic risk is from a high-volatility repricing of bond yields due to an inflation overshoot that comes sooner than the Fed expects, so delivers a quicker tapering and tightening process relative to current expectations
Source: JPM, The Market Ear
