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    Download the latest Guide to the Markets update
    Quarterly:      PDF        Monthly:     PDF

    Key themes for 1Q 2023

    Karen Ward, Chief Market Strategist, previews this quarter’s themes and invites you to use the Guide to help navigate the investment landscape.

    The fixed income reset

    Bonds had an awful year in 2022 as inflation returned with a vengeance and central banks were forced to slam on the monetary brakes (Guide to the Markets – Europe pg 20, pg 31). Inflation now looks to have peaked in many regions and this should allow the central banks to pause by the spring (pg 7). We therefore believe the fixed income reset is complete. Bonds now offer more income than they have in over a decade and government bonds are once again an effective hedge against recession risk (pg 71).


    A bad year for the economy, a better year for stocks

    Developed world economies will still be dealing with the after effects of higher interest rates and there is a strong likelihood of recession in 2023. But investors are aware – this is the most well-predicted recession on record (pg 23). So long as the earnings contraction is relatively moderate, we expect investors to look through near-term earnings downgrades (pg 63). Value and income stocks look best positioned (pg 51, pg 49). 


    Catalysts for a recovery in EM assets

    Emerging markets assets – and Chinese stocks in particular – have been depressed by geopolitical risks, regulatory uncertainty, and Covid lockdowns (pg 44). However, we believe these risks are now well discounted, so a resolution in even just some of these concerns could lead to considerable upside from today’s low valuations (pg 62).


    Sustainability the key mega-trend

    Following Russia’s invasion of Ukraine and spiralling energy prices, European economies have to dramatically shift how they source and use energy (pg 33). This transition is driven just as much by fears around energy security as it is by climate objectives. This will benefit the equity, bond and infrastructure assets that will facilitate the change (pg 85). 


    MORE INSIGHTS

    Guide to Alternatives

    Get insights on macro topics such as manager dispersion, while also diving into real estate, private credit, private equity and hedge funds and more.

    Read more
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    Investment Outlook 2023

    We believe there are already convincing signs that inflation is set to moderate, which is good news for stocks and bonds. Learn more about our macro views in our 2023 Investment Outlook.

    Read more
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    On the Minds of Investors

    Drawing on the depth and breadth of their market and economic expertise, our global macro strategists offer insight into today's big investment themes to enable more confident portfolio decisions.

    Read more

    The Market Insights programme provides comprehensive data and commentary on global markets without reference to products. Designed as a tool to help clients understand the markets and support investment decision-making, the programme explores the implications of current economic data and changing market conditions.

     

    For the purposes of MiFID II, the JPM Market Insights and Portfolio Insights programmes are marketing communications and are not in scope for any MiFID II / MiFIR requirements specifically related to investment research. Furthermore, the J.P. Morgan Asset Management Market Insights and Portfolio Insights programmes, as non-independent research, have not been prepared in accordance with legal requirements designed to promote the independence of investment research, nor are they subject to any prohibition on dealing ahead of the dissemination of investment research. This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own professional advisers, if any investment mentioned herein is believed to be suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not a reliable indicator of current and future results. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy. This communication is issued in Europe (excluding UK) by JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, R.C.S. Luxembourg B27900, corporate capital EUR 10.000.000. This communication is issued in the UK by JPMorgan Asset Management (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.

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