JPMorgan Asset Management’s chief global strategist has advised investors to focus on valuations, invest in value stocks, sell cryptocurrencies, and stay away from bitcoin. “The Fed is overestimating the strength of the US economy because it feels guilty about the fact that inflation has risen under their watch,” he said.
JPMorgan Strategic Recommendations
JPMorgan Asset Management’s chief global strategist, David Kelly, has some advice on what investors worried about Federal Reserve hawks should invest in.
After Federal Reserve Chairman Jerome Powell’s speech Friday in Jackson Hole, Wyoming, he was quoted as say:
The economy has gone ahead in a recession and is on a banana peel now.
“We are taking strong, rapid steps to cool demand so that it aligns better with supply, and to keep inflation expectations steady. We will continue to do so until we make sure the job is done,” Powell He said last week.
Kelly warned of more volatility in the future, and stressed that investors should focus on defensive plays and valuations rather than the short-term trend, such as investing in value stocks, long-term bonds and income-generating alternatives.
The strategist advised investors to sell cryptocurrencies while staying away from big-cap technology stocks and bitcoin:
Make sure to increase the weight of US and international value, as well as stocks with a relatively low P/E ratio.
Citing the higher risks of a recession, Kelly said the economy will “feel more normal” by the end of next year. However, he cautioned, the real question is “How much damage does the Fed want to do to this economy?”
As the chief global strategist at JPMorgan Asset Management said:
The Federal Reserve overestimates the strength of the US economy because it feels guilty about the fact that inflation has risen under their watch.
Kelly also said on Monday that the US economy “will teeter on the brink of recession” until the Federal Reserve relents in its struggle to tame inflation. He expects the Fed to raise the federal funds rate to a range of 3.75%-4% by the end of the year, from currently 2.25%-2.5%. “The Fed is then on a hike and hoping the economy will avoid a recession,” he described.
Jamie Dimon, CEO of JPMorgan, warned earlier this month that “something worse‘Out of a recession that could come. In June, the CEO said incoming economic hurricaneInvestors are advised to prepare themselves.
This week, Goldman Sachs urged investors to buy goods And worry about stagnation later. Goldman analysts stressed that “stocks could take a hit as inflation continues to rise and the Fed is likely to be surprised by the hawks”.
What do you think of the recommendations of the chief global strategist at JPMorgan Asset Management? Let us know in the comments section below.
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