JPMorgan Chase & Co.’s analysts said an in-house indicator is “now flashing a buy-signal” — something that has typically indicated the S&P 500 Index is poised to gain.
The bank’s global market intelligence team, lead by Andrew Tyler, said its so-called tactical positioning monitor is pointing to “material upside” for the stock-market benchmark, though they flagged risks stemming from crowded positions in semiconductor stocks and the outlook for the US-Iran war. But the group said they continue to be “tactically bullish” on US stocks, anticipating equities will benefit from lower bond yields, a weaker dollar and strong corporate earnings.
“These tailwinds are driven by a decrease in kinetic hostilities in the Middle East and a hold by the Fed,” Tyler added, referring to expectations that the central bank is likely to keep its benchmark rate steady after its meeting Wednesday.
US stocks were little changed Monday as oil prices retreated and the conflict between the US and Iran eased up, with the S&P 500 ending the session up 0.02% and the Nasdaq 100 dipping 0.3%.
Tyler said there’s some pressure on the market from technology companies, given that the increase in spending on AI is “no longer an automatic win” for chipmakers and others that provide the infrastructure. But he noted that consumer spending is pointing to strength in the economy, citing the jump in household new worth and checking-account balances, strong retail sales and little signs of credit stress.
Written by: Felice Maranz @Bloomberg
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