A recent report signed by JPMorgan Variable Analysts said Eurozone shares will have a “purchase opportunity.” As they specified, “it is positive that, in the last six months, the actions of the Eurozone have crossed a phase of digestion.” Because? Because the Euro Stoxx 50 “has stagnated in absolute terms”, to the point that “is 6% -7% below the maximum of February”, which allows an interesting entry level.
So the conclusion was direct “prepare to buy again in the eurozone” because they believe after the consolidation that occurred in the euro Stoxx 50, “Now the time to increase exposure in the Eurozone is approaching.”
The strategists also compare it with the performance of Wall Street. “This is especially notable against the US, where the S&P 500 has reached new maximumsand the relative yield between Eurozone and the US has been going back back. ” We consider that this phase of digestion will ultimately be healthy, since the flows are normalized, and there could be a new impulse in the Eurozone, “they explained.
And that this will happen as the impact of the German stimulus approaches and the improved credit impulse begins to feel in the Eurozone, as a result of the previous monetary relief of the European Central Bank (ECB).
“After excessive optimism in the Eurozone has moderated, and now that the solid results of the US technological sector are already discounted and artificial and beta intelligence factors are at maximum, we think that A new purchase opportunity in the Eurozone is coming in the next 1-2 monthsboth in absolute and, possibly relative terms in front of the US, “they determined.
“We still stay out of the Euro Stoxx 50 tactically, since staging risks They must still be digested, but we planned to add exposure in the next 1-2 months, “they insisted, especially with regard to the US. Now the bank’s strategists believe that their prognosis would be imposed a staging environment in the second semester can materialize.
“Until recently, resilient data challenged this vision, but The negative impact of tariffs may not have been canceledbut only delayed, “they said in their report. In fact, they point out that the headlines on tariffs” will not disappear “, and remember that the increase in the effective rate of tariffs remains the largest in 100 years, so it is likely that the final levels” are probably located near the original assumptions of the ‘Day of Liberation’. “
Also, in JP Morgan they are “comfortable” with the recommendation of “Maintain long durations (long -term bonds)”because “any possible inflationary rebound in the US due to tariffs could harm the purchasing power of the consumer, and the labor market is weakening, which could lead to a more aggressive action by the Federal Reserve (Fed)“
Emerging: JP Morgan also sees an opportunity
Analysts advise Overcoming emerging markets compared to developedanticipating better performance for the possible improvement in trade with China, strengthening of currencies, monetary relief and greater policy support. They point out that these markets They look cheap and little exposedwith emphasis on the Chinese technology sector.
In addition, JP Morgan highlights the United Kingdom for its low valuation, high performance by dividends and defensive profile against possible episodes of volatility.
Source: Ambito
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