JPMorgan Chase & Co.'s global market intelligence team, led by Andrew Tyler, has announced that their in-house tactical positioning monitor is now indicating a "buy-signal" for the S&P 500 Index. This signal typically suggests the S&P 500 is poised for gains, and the team anticipates "material upside" for the stock-market benchmark.
The analysts remain "tactically bullish" on US stocks, expecting equities to benefit from lower bond yields, a weaker dollar, and robust corporate earnings. However, they also acknowledged potential risks, specifically pointing to crowded positions within semiconductor stocks and the broader geopolitical uncertainty surrounding the US-Iran war.
This bullish stance comes amidst a backdrop where the semiconductor sector has experienced its best run since the late 1990s, largely driven by the AI trade. JPMorgan's research also suggests that the core PCE inflation might come in at +0.2%, lower than the consensus of +0.3%, which could be a positive surprise for the market, though they noted potential methodology changes contributing to this decline.
