JPM not Chasing
What is it?
JPMorgan Chase & Co. sent out precautionary news to investors. They are telling investors not to chase the recently high stock prices. While there was a rally around two weeks ago, stocks sold off some of those gains last week.
“‘While the economy’s recent resilience may delay the onset of a recession, we believe that most of the lagged effects of the past year’s monetary tightening have yet to be felt, and ultimately a recession will likely be necessary to return inflation to target,’ JPMorgan strategists led by Marko Kolanovic wrote in a recent note to investors.”*
Why does it matter?
The difference in opinions creates an opportunity in the market. Other firms have other views about how markets will perform in the future.
“‘We maintain a defensive asset allocation and believe the risk-reward for equities remains poor given the disconnect between equities and bonds, high likelihood of a recession over the coming quarters, high rates, tightening liquidity, rich valuations and the still-narrow market breadth,’ they wrote.”*
That sounds pretty bleak considering the recent optimism in the markets. What makes their stance so interesting is that they are one of the world’s largest financial firms. They can sometimes provide insights that are not available to smaller firms or individual investors.
Crypto Investments Pick Up Steam
What is it?
“With a raft of recent announcements from big-name financial firms offering bitcoin (BTC) products, institutionalization of the biggest, most significant cryptocurrency looms.”**
Why does it matter?
Investors have been buying up crypto related assets as more companies and assets enter the space. If that trend continues, the value of the underlying cryptocurrencies could continue to rise. Last week we took profits on some investments related to cryptocurrencies. We do manage a cryptocurrency model that invests in crypto related assets. We are partially invested there and may add to or reduce investments in that space based on the changes in risk and opportunities.
Other articles we found interesting this week:
What’s next for markets after aborted Wagner mutiny leaves Russia’s Putin weakened
Student-loan payments are coming back — and these are the stocks most at risk
Rates will rise again in 2023, but at a slower pace
Current 401(k) portfolio
Our last 401(k) portfolio reallocation: 5/19/2022.
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Our process attempts to identify trends and momentum in the financial markets. With that information, we align our clients’ portfolio accordingly in the hope to help our clients accomplish their life goals while attempting to lower the risk of a large drop in their portfolio.
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Sources:
*Jing Pan. “’Recession Will Likely Be Necessary’: JPMorgan” Yahoo Finance. 6/21/2023. https://finance.yahoo.com/news/recession-likely-necessary-jpmorgan-just-182811331.html
**Michael J. Casey. “Will BlackRock’s Bitcoin ETF Take the Spirit Out of the Honey Badger?”. Coin Desk. 6/23/2023. https://www.coindesk.com/consensus-magazine/2023/06/23/will-blackrocks-bitcoin-etf-take-the-spirit-out-of-the-honey-badger/
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