Multi-Asset Solutions Weekly Strategy Report - J.P. Morgan Asset Management
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Multi-Asset Solutions Weekly Strategy Report

In brief
  • The current U.S. earnings growth downcycle has been largely consistent with the recent deterioration in macroeconomic momentum.
  • Realizing today’s earnings growth expectations would require economic outcomes that we see as upside risks rather than a reasonable base case. And 2020 EPS growth rates are high despite the fact that the level of profits is being steadily revised lower.
  • Our below-consensus outlook anticipates 2020 earnings growth in the low-to-mid single digits, which is far from disastrous, but not enough to drive large equity market gains without further substantial valuation expansion.
  • We reaffirm our moderate underweight stance on equities. Across equity regions we continue to favor more defensive markets such as the U.S. and Canada, and remain underweight more cyclically geared markets such as Europe and emerging markets.
EXHIBIT 1: SOFT MACRO DATA POINTS TO THE POTENTIAL FOR U.S. EPS DISAPPOINTMENT

EXHIBIT 1: SOFT MACRO DATA POINTS TO THE POTENTIAL FOR U.S. EPS DISAPPOINTMENT

Source: Refinitiv, J.P. Morgan Asset Management Multi-Asset Solutions; data as of October 10, 2019. For illustrative purposes only.

The Weekly Strategy Report (October 14, 2019)

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Important information

Please be aware that this material is for information purposes only. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. JPMorgan Asset Management Marketing Limited accepts no legal responsibility or liability for any matter or opinion expressed in this material.

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