Quickly improving economy, with a slow moving Fed

Recent economic and employment indicators have improved markedly in recent weeks. The Federal Open Market Committee (FOMC) appropriately acknowledged this recent strength, while continuing to reassure investors it would not act prematurely in pulling back monetary support.

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Same Dovish Tune with More Hawkish Melodies

The rollout of COVID-19 vaccines and the passing of a further USD 1.8trillion fiscal package has brightened the economic outlook and today’s meeting gave investors a gauge on how this might adjust monetary policy in the years ahead.

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Fiscal Surge and Easy Money

The pandemic would always have demanded a dramatic response in terms of easy monetary and fiscal policy. However, policy responses have been shaped not just by the needs of the present but by the lessons of the past.

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China’s path to policy normalization

This paper, written by Chaoping Zhu, discusses the potential path for China’s policy normalization after the country’s economy recovered from COVID-19.

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What are the implications of the Brexit deal for the economy and markets?

It is hard to remember a time when Brexit was not dominating British headlines, but at the midnight hour, UK and EU negotiators finally reached agreement on a new trade deal. This piece addresses the key questions surrounding the deal: what is covered, how does it impact the outlook for the UK economy, and what are the market implications?

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US election: Democrats take control of the Senate

Several major news outlets are now projecting that the Democrats will win the two remaining Senate races following Tuesday's run-offs in Georgia.

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Northeast and Southeast Asia paving the way to prosperity

This paper, written by Ian Hui and Alex Cheung, analyzes the recovery of various Asian economies from the COVID-19 pandemic and discusses the near-term and longer-term regional outlook.

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The Fed’s Timetable

Turbulence defines today’s investment environment, with great waves of uncertainty surging from the pandemic, the election, fiscal policy and a slowdown in what had been, to this point, a sharp recovery from a very deep recession. The waves of uncertainty should fade in 2021 and, as they do so, the primary role of interest rates in determining asset class returns should reassert itself.

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Rebalancing for high-quality growth: What to expect from China’s new five-year plan

This paper, written by Chaoping Zhu, gives our prospects about China’s upcoming 14th five-year plan. To be approved in October and implemented during 2021 to 2025, this plan will have profound impacts to Chinese economy and financial market.

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A commitment to easy money

This paper, written by David Kelly, addresses the FOMC's September meeting announcement.

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ECB: Talking the talk but not walking the walk

The lack of policy action from the ECB is much more to do with the reduced effectiveness of the remaining options at its disposal rather than the ECB being comfortable with the current state of the economy.

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The Investment Implications of the Coronavirus Debt Surge

Notes on the week ahead from Dr. David Kelly, Chief Global Strategist

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US presidential election 2020

All the analysis investors need as America selects its next president

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Introducing our Asia COVID-19 tracker

This paper, written by Ian Hui and Alex Yeo, provides a framework for comparing the policy responses and risks faced by Asian economies from the pandemic.

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More than ever, monetary policy is being dictated by the virus

As widely anticipated, the Federal Open Market Committee (FOMC) unanimously voted to maintain the current Federal funds target rate at a range of 0.00%–0.25% and the interest paid on excess reserves (IOER) at 0.10%. In addition, the committee will maintain its current pace of gross purchases of U.S. Treasuries and agency mortgage backed securities at roughly $80 billion and $90 billion per month, respectively.

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2Q20 Earnings: Guide me to your profits

Equity markets have rebounded quickly from their March lows on the back of the unprecedented fiscal and monetary policy response. Although technology and healthcare are holding up relatively well compared to the more cyclical parts of the equity market, 2Q2020 should mark a low point for earnings.

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EU agrees on budget and recovery fund: A step towards more integration

After four days of negotiations the European Union (EU) council has come to an agreement on a EUR 1,074 billion Multiannual Financial Framework and a EUR 750 billion Next Generation EU recovery fund.

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China’s 2Q GDP and June economic data improve on post-COVID rebound

This paper, written by Marcella Chow and Chaoping Zhu, discusses the rebound in Chinese economic activity and its implications for investors.

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Investment Outlook for 2020

Discover the 2020 edition of J.P. Morgan's Investment Outlook; gain insights from our team’s broad view on the major economies and asset markets globally.

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When it comes to fixed income, do you like high yield?

One of the best trades to put on in the aftermath of the financial crisis was going long high yield. Spreads blew out to nearly 18% in November 2008, implying a default rate of almost 30%. Looking back, this is far from what actually materialized, as default rates on U.S. high yield peaked at a level of 11% in November of the following year. With the Federal Reserve (Fed) becoming increasingly active in credit markets, we have been getting more and more questions on the outlook for high yield; the bottom line is that while valuations are not terribly compelling, the near-term path for credit spreads may be tighter.

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Enhance yields with Chinese bonds in the zero interest rate era

This paper, written by Ian Hui and Chaoping Zhu, looks at the attractiveness of the Chinese bond market in the current global environment.

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The European Central Bank levels up its stimulus efforts

Today’s actions from the European Central Bank (ECB) were at the upper end of market expectations.

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The Fed’s balance sheet: To infinity and beyond

To frame the balance sheet discussion, we consider the impact to real GDP, employment and inflation under each recovery scenario.

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The European Central Bank aims to ‘thread the needle’

This paper, written by Jai Malhi, examines the European Central Bank meeting outcome and its investment implications.

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Monetary Medicine until the Patient is on the Mend

This paper addresses the FOMC's April meeting announcement.

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The Great Glut: A historic supply and demand shock in the oil market

This paper, written by Tillman Galler and Kerry Craig, discusses the latest movements in the oil markets amid the global pandemic and implication for investors.

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1Q20 earnings: Virus oddity

This paper, written by David Lebovitz and Tyler Voigt, reviews the 1Q 2020 U.S. earnings results and the significant volatility that has taken place.

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Chinese GDP in Recession amid Virus Outbreak

This paper, written by Chaoping Zhu, discussed the performance and outlook of Chinese economy, policies amid the global pandemic and implication for investors.

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The COVID-19 Relief Bill-Holding the Economy in Suspended Animation

This paper, written by Dr. David Kelly, reviews the U.S> relief bill and its investment implications.

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A COVID-driven spike in claims

This paper, written by David Lebovitz and Meera Pandit, reviews the surge in U.S. initial claims for unemployment and its investment implications.

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What is the Fed doing and what does it mean for fixed income?

This paper, written by David Lebovitz, Alex Dryden, and Jack Manley, reviews the latest U.S. Fed increased liquidity actions and its investment implications.

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The investment implications of COVID-19: March 17 update

This paper written by Dr. David Kelly updates the latest on the coronavirus impact to global markets.

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The investment implications of COVID-19

This paper, written by David Kelly, provides an update on the investment implications of COVID-19.

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UK monetary and fiscal stimulus – Unprecedented shock, unprecedented response

This paper, written by Karen Ward, highlights the recent rate cut by the Bank of England and its investment implications.

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Monitoring the global impact of COVID-19

This paper, written by Tai Hui and Karen Ward, provides a framework for tracking COVID-19 infection rates globally, monitoring the impact on economic activity using high frequency or daily data, and assessing the economic linkages that could serve to transmit economic stress.

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Cash: it’s what you do with it that matters

This paper, written by David Lebovitz and Tyler Voigt, highlights the short-term and long-term uses of corporate cash investors could take advantage of within their portfolios.

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The Investment Implications of the 2020 Election

This paper, written by Dr. David Kelly, Hannah Anderson and Meera Pandit, addresses the upcoming U.S. election and its investment implications.

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4Q19 Earnings: Lots of moving parts

This paper, written by David M. Lebovitz and Tyler J. Voigt, reviews 4Q19 U.S. earnings with performance of various sectors and its investment implications.

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Cyclical tailwinds vs. secular headwinds in Asia ex-Japan equities

This paper, written by Dr. Jasslyn Yeo, explains why cyclical tailwinds support a positive stance for Asia ex-Japan equities this year, and why persisting secular headwinds mean that the investment case for Asia ex-Japan growth stocks remains strong.

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2019 Market Bulletins

Market Strategists provide commentary and analysis on the latest events and their likely impact on the markets and investing.

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