Skip to main content
logo
  • Funds

    Fund Listing

    • Mutual Funds
    • ETFs
    • How to Invest

    Capabilities

    • Alternatives
    • Equities
    • Fixed Income
    • ETF Investing

    In Focus

    • Investing for Income
    • Investing for Fixed Income
    • Investing for Growth
    • Investing for Sustainability
    • Investing for Alternatives
    • Global Macro Sustainable Fund
    • Global Macro Opportunities Fund
  • Insights

    Market Insights

    • Guide to the Markets
    • Guide to Alternatives
    • Weekly Market Recap
    • On the Minds of Investors
    • Guide to China
    • Market Insights Overview

    Portfolio Insights

    • Long-Term Capital Market Assumptions
    • Global Asset Allocation Views
    • Global Equity Views
    • Global Fixed Income Views
    • Portfolio Insights Overview
    • Sustainable investing
  • Investment Ideas
    • Managing Volatility
    • Alternatives
    • Sustainable investing
  • Resources
    • Multimedia
    • Announcements
    • Insights App
  • About Us
    • Corporate and Social Responsibility
    • Diversity, Equity and Inclusion
  • Contact Us
  • Role
  • Country
  • Search
    Search
    Menu
    You are about to leave the site Close
    J.P. Morgan Asset Management’s website and/or mobile terms, privacy and security policies don't apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. J.P. Morgan Asset Management isn’t responsible for (and doesn't provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the J.P. Morgan Asset Management name.
    CONTINUE Go Back
    1. Waiting it out. . .

    • LinkedIn Twitter Facebook Line

    Waiting it out. . .

    17/03/2020

    Bob Michele

    The volatility across markets has created considerable anxiety amongst investors trying to gauge the effectiveness of the healthcare response + the monetary response + the fiscal response. Given how varied the responses are by region and country, this may be an unsolvable riddle over the near term. As lenders of our clients’ money, we want to own bonds of solvent companies. But as fiduciaries, we can’t buy bonds without knowing the depth of the impending contraction and the response to it.

    What signals are we in GFICC looking for to add liquidity to the bond market?

    • A further monetary response by central banks. There is more that the central banks can do and should do to keep the markets stable while fiscal policy packages are debated and agreed. Will the Federal Reserve ultimately seek the authority to buy corporate debt? Will the European Central Bank look to expand the size of its asset purchases to better support peripheral sovereign debt and the corporate bond market? How many emerging market central banks will aggressively cut official rates?
    • A powerful global fiscal response to backstop aggregate demand in a world devoid of final demand. We need to see programs that get operating cash to businesses affected by the virus. Over the next few months, businesses cannot feel the pressure to cut costs through layoffs. Programs that get cash into the hands of consumers is also very helpful.

    How are we investing portfolios?

    • We are concentrating in markets that the central banks have indicated they are backstopping. This includes developed and emerging market government bonds, US agency mortgages and some corporate debt in Europe. As volatility and uncertainty remain the norm during the next quarter, it will be critical for the central banks to anchor the markets with their policies.
    • It is too soon to add US corporate credit. The market is making broad assumptions on which industries will be restructured and which will fare well through the crisis. Without knowing whether we will see a fiscal package aimed at companies, or broader industries, and whether or not the Federal Reserve will seek to purchase corporate debt – it’s just an educated guess as to what the market has priced in. What is different this time is the size of the private equity and credit markets and it is unknown what the knock-on effect to the public credit markets could be in crisis.
    • We are expecting a rebound in risk assets as we hit a bottom and the aggregate policy response starts to gain credibility. We would de-risk further on that bounce in expectation of a return to the lows as the economic reality of a global economic shutdown becomes evident. There will be plenty of time to pick through markets when the adrenaline has faded.

    Long story, short…….remain defensive, watch for policy responses, expect further de-risking and unwinding of leverage…and remain patient……there will plenty of buying opportunities over the next couple quarters.

    • Market Views
    • Fiscal Policy
    • Monetary Policy
    • Economic Outlook

    RELATED ARTICLES

    Five Realistic Surprise Predictions for 2023

    Every December, we try to come up with predictions for the New Year. We believe these predictions have at least a one in three probability of materializing – making them realistic while not necessarily our base case. We also judge that they are not currently priced in the markets – making them surprises relative to investor positioning.

    Read more

    FOMC Statement: September 2021

    Following the Fed’s announcement, find our latest market views from the Global Fixed Income Currency & Commodities (GFICC) U.S. Rates team.

    Read more

    Multiple reasons for multi-family

    The agency CMBS market offers an attractive way for fixed income investors to access one of the more resilient sectors of the commercial real estate market.

    Read more
    JPMorgan Asset Management

    • Terms & Conditions
    • Financial Services Guide
    • Privacy Policy
    • Cookie Policy
    • Investment Stewardship
    • Voting Policy
    • Unit Pricing Policy
    • Complaint Resolution
    • Sitemap
    J.P. Morgan

    • J.P. Morgan
    • JPMorgan Chase
    • Chase

    Please note:  Following recent amendments to the Corporations Act, where unitholders have provided us with your email address, we will now send notices of meetings, other meeting-related documents and annual financial reports electronically unless the unitholder elects to receive these in physical form and notify us of this election. Unitholders have the right to elect whether to receive some or all of such Communications in electronic or physical form, the right to elect not to receive annual financial reports at all and the right to elect to receive a single specified Communication on an ad hoc basis, in an electronic or physical form.


     

    All investments contain risk and may lose value. This advertisement has been prepared and issued by JPMorgan Asset Management (Australia) Limited (ABN 55 143 832 080) (AFSL No. 376919) being the investment manager of the fund. It is for general information only, without taking into account your objectives, financial situation or needs and does not constitute personal financial advice. Before making any decision, it is important for investors to consider the appropriateness of the information and seek appropriate legal, tax, and other professional advice. For more detailed information relating to the risks of the Fund, the type of customer (target market) it has been designed for and any distribution conditions please refer to the relevant Product Disclosure Statement and Target Market Determination which have been issued by Perpetual Trust Services Limited, ABN 48 000 142 049, AFSL 236648, as the responsible entity of the fund available on https://am.jpmorgan.com/au.