JP Morgan is also rapid on American stocks as some observers have warned that the economy has started paying the price for President Donald Trump’s tariff.
Investment banking giants predict that S&P 500, Wall Street’s benchmark index, will get “Return of High Single-Return in the next 12 months”.
One of the main causes of optimism is that markets do not care for the signals of economic recession. Instead, traders are focused on flexible corporate income and later economic reforms.
Since President Trump fired the first tariff salvo on 2 April, economists have reduced the entire year American development forecasts from 2.3% to 1.5%. Nevertheless, S&P 500 has increased more than 28% in four months. Despite recent economic data, the index has kept stable despite revealing tenderness in the labor market and consumptionAlso viscous in manufacturing and service sector inflation,
While the warnings of Macro analysts are related to the possibility of playing in the background, the corporate income in the US is ignoring the risks of the recession, at least in the short term, it is the second catalyst for JP Morgan’s fast thesis.
More than 80% of S&P 500 companies have recently reported their Q2 income, with 82% Best The strongest performance since the second quarter of the Revenue Forecast -2021 beating the expectations of earning and beating 79%.
Winner and losers
According to JP Morgan, while Wall Street analysts initially estimated an increase in income less than 5%, the index is now at speed to an impressive 11% growth rate. This strong showing supports the ongoing boom in the stock market.
Analysts of JP Morgan’s Wealth Management said, “The expectations of the entire year for both this year and the next have already started.” Said In a market note on Friday, saying that the market is rapidly distinguishing between the winners of the Trump trade war and loser.
Additionally, the market is now detecting and pricing in which companies are getting the most hit by American tariffs. By now, it seems that the mega corporations will be cured. This can increase the case in the market and for positive emotion.
JP Morgan analysts reported that consumer-supporting and small companies are facing a stable-earning approach with the power of bargaining partners and rigorous supply chains.
This relationship for JP Morgan’s last catalyst: Trump’s tariff bark is proving worse than its bite for large firms, which are aimed at securing discounts and even tariff policies, aiming to spark a manufacturing boom in a tailwind.
“The latest example President Donald Trump suggests that imported semiconductors will be taxed at a 100% rate until companies are committed to transferring production in the United States. Another signal? Apple products are exempted from the latest tariff rates on Indian goods. In fact, the company announced an additional $ 100 billion in American manufacturing facilities.
Big firms get additional benefits from a big beautiful act (OBBA)Under which firms can claim 100% bonus depreciation for the purchase of qualified commercial property and for immediate expenses of domestic research and development costs. According to some analysts, the depreciation policy may increase the free cash flow for some more than 30%, which can encourage more investment.
The bank stated that its investment strategy focuses on Large-Cap Equity, especially in technology, financial and utilities, which assumes that this new economic environment is best deployed to navigate.
Crypto angle
JP Morgan’s positive attitude for shares can be well bent for cryptocurrency, as both move forward in the lead. There is a lot going on for itself in the digital assets market, in which the Trump administration has appointed Pro-Cripto officials to key regulatory positions.
Recently, US Securities and Exchange Commission (Sec) Under certain conditions, liquid stacking falls out of the purview of securities law. The ruling has raised expectations for Spot Ether ETF winning regulator approval.
Ether holds more than 13% rallies of more than $ 4,200, which has reached the levels seen in the last 2021. Prices have increased by about 50% last month, coindesk data show.
