JPMorgan Asset Management’s chief global strategist advised investors to focus on valuations, invest in value stocks, sell crypto and stay away from bitcoin. “The Federal Reserve is underestimating the strength of the U.S. economy and feels guilty that inflation is under their watch,” he said.
JPMorgan’s strategist recommendations
David Kelly, chief global strategist at JPMorgan Asset Management, has some advice on what to invest for investors worried about a hawkish Federal Reserve.
Federal Reserve Chairman Jerome Powell said following a speech in Jackson Hole, Wyoming on Friday:
The economy has one foot in recession and the other is now on a banana peel.
“We are taking strong and swift action to better match demand with supply and maintain inflation. “We’re going to keep going until we’re sure the job is done,” Powell said last week.
Warning of future volatility, Kelly emphasized that investors should focus on defensive plays and valuations, such as investing in value stocks, long-term bonds and income-generating options, rather than a short-term orientation.
Advising investors to sell cryptocurrencies while driving away from big tech stocks and bitcoin, strategist:
Be sure to overweight US and global value stocks as well as stocks with relatively low price-to-earnings ratios.
She said the economy would feel “more normal” by the end of next year, citing fears of a deep recession. However, the real question is “How much damage does the Fed want to do to this economy?” He warned that
JPMorgan’s chief global strategist for asset management also commented:
The Federal Reserve is overestimating the strength of the U.S. economy because it feels guilty about rising inflation under their watch.
Kelly also said the U.S. economy teeters “on the brink of collapse” until the Federal Reserve steps up its fight to control inflation. The Fed expects to increase the federal funds rate to 3.75%-4% by the end of the year from 2.25%-2.5%. “The Fed can stop hiking and hope that the economy will avoid a recession,” he explained.
JPMorgan chief executive Jamie Dimon warned earlier this month that “something worse” could come from the collapse. In June, the executive warned of the coming economic storm, advising investors to brace themselves.
This week, Goldman Sachs urged investors to buy commodities and worry about a later downturn. Goldman analysts emphasized that “equities could suffer as inflation continues to rise and the Fed is more likely to be surprised by the hawkish side.”
What do you think of the recommendations made by JPMorgan Asset Management’s chief global strategist? Let us know in the comments section below.
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