According to a report by Bloomberg on Monday (22nd), JPMorgan strategists said that the US Federal Reserve (Fed) may raise interest rates for the last time in September, and then will not take a hawkish stance, which is expected to promote US stocks to continue to rise in the second half of the year. .
“We expect the Fed to hike rates again sharply in September, but don’t expect the Fed to take another hawkish stance that surprises the market thereafter,” a team led by JPMorgan strategist Mislav Matejka wrote in a report on Monday. It is estimated that the trade-off between economic growth and monetary policy will improve from now on and help the overall market recover.
The analyst team is among those bullish on U.S. stock gains, predicting that rate-sensitive growth stocks will maintain their “outperformance” despite concerns that the Fed may continue to take a hawkish course. Fed officials last week sent mixed signals on the outlook for interest rates, leading toS&P 500 IndexIt snapped a four-week winning streak. Senior strategists, on average, see the federal funds rate rising 3.5 percent from current levels by the end of the year, a Bloomberg survey found.
On the other hand, Goldman Sachs strategists also believe that the path of inflation and economic growth will drive the stock market in the second half of the year, but they believe that after the best summer rally in U.S. stocks on record, follow-up upside is limited. “Renewed concerns over the prospect of a recession will almost certainly give back recent gains,” strategist David J. Kostin wrote in a note.
This week, both markets and investors will focus on the Fed’s annual meeting in Jackson Hole, where comments from Fed Chairman Powell could revise expectations for a rate hike. Tech stocks in particular are under pressure to raise interest rates, which mean a bigger discount to the present value of future profits, hurting the most highly valued tech stocks while boosting so-called value stocks.
In addition, despite falling bond yields and investors betting that the pace of Fed rate hikes will slow, tech-heavy stocksNasdaq The 100 Index (NDX-US) is up more than 20% from its June low, but the index fell again last week, snapping a four-week winning streak.
UBS Global Wealth Management analyst Mark Haefele warned investors on Monday not to chase a rebound as valuations get expensive again.
“We recommend that investors take advantage of the rally in technology stocks by underweight positions that exceed recommended benchmarks, reduce portfolio exposure to riskier stocks, rebalance funds, and invest in our favored value,” Haefele wrote in the letter. and high-quality yields and other market sectors.”
This article does not provide partner reprints