JPMorgan Mid-Year Outlook: Looking Back & Ahead With 8 Tips

We think the worst is over for investors.

Megan Werner from JPMorgan said in mid-year outlook.

Despite the likelihood of an economic downturn and a U.S. recession by the end of the year, the worst may be over for investors.

We think that both stocks and bonds can continue to generate healthy returns for investors through the end of the year and into 2024.

Looking Back

1.Stock market: $S&P 500(.SPX)$ has recovered from its lows in October 2022 and is trading 15% higher.

2.Economy: Profits and margins have decreased slightly, but sales are resilient, transportation and energy costs are lower, and the scramble for workers has eased.

3.Sectors: Technology and communication services sectors have performed well in the S&P 500 this year, recovering from price declines in 2022.

Semiconductor stocks are outperforming, benefiting from the shrinking inventory glut and the potential for artificial intelligence (AI) application.

4.Housing: The housing market is stabilizing, with homebuilders' rates stabilizing and the market bouncing back.

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Looking Ahead

5.European equities show impressive momentum in economic growth and corporate earnings, with purchasing manager indices at their highest levels in a while.

6.China's first-quarter GDP data indicates a rebound in consumption and services activity, with potential for further growth. $CSI China Internet ETF(KWEB)$

Valuations are reasonable, earnings are poised to grow at a mid-teens pace and policymakers seem likely to move in the direction of more market-friendly practices.

Things to Remind

7.Diversify portfolios: Investors should consider diversifying their portfolios with European and Chinese equities due to the potential for higher returns.

8.Avoid concentrated positions: Concentrated positions in single stocks or securities carry risks, as seen in the recent bank failures. Investors should consider strategies to mitigate this risk, such as options trading, target price selling strategies, or diversifying through alternative investment vehicles.

It is important for investors to assess the consequences of a material loss in concentrated positions and consider appropriate preventive measures.

To learn more about the report, you can click https://www.jpmorgan.com/insights/outlook/mid-year-outlook/2023-mid-year-outlook-key-takeaways