US equities to continue positive streak through the end of the year –JPMorgan

JPMorgan Asset Management sees US stocks continuing their positive streak well into 2H 2024 amid solid earnings and expectations of lower interest towards the end of the year, the firm wrote in its mid-year outlook report (pdf).

Where it sees the most returns: Fixed income bonds and large-cap stocks.

Yes, but: The firm is not too optimistic about medium-term returns, cautioning investors to “remain humble” while interest rates, valuations, and stock-bond correlations all fluctuate amid relative uncertainty.

US benchmarks are near a record high, driven by rallying AI stocks like Nvidia and Microsoft, and traders’ expectations for lower interest rates. The one positive about the rally? It’s well-dispersed, with shares across sectors seeing a boost in valuation as earnings recover across sectors, JPMorgan says.

There are still risks, but JPMorgan views them to be modest. Economic headwinds amid ongoing geopolitical tensions, and uncertainty around the future AI, are viewed as the biggest risks.

MARKETS THIS MORNING-

Asian markets are mostly in the red as traders await Bank of Japan’s interest rate decision later today. Meanwhile, Wall Street futures are little changed after another record close for the S&P 500 and Nasdaq.

THE CLOSING BELL-

The ADX rose 0.6% yesterday on turnover of AED 996.6 mn. The index is down 6.3% YTD.

In the green: Hayah Insurance Company (+9.7%), Abu Dhabi National Company for Building Materials (+8.3%) and Waha Company (+4%).

In the red: Gulf Cement Company (-7.8%), E7 Group Warrants (-4.3%) and E7 Group (-4.2%).

Over on the DFM, the index closed up 0.02% on turnover of AED 211.9 mn. Meanwhile Nasdaq Dubai closed up 0.2%.