Insights | J.P. Morgan Asset Management

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.

EXPLORE OUR FLAGSHIP INSIGHTS

Liquidity Insights

Discover our vast array of liquidity insights covering global investment news and trends.

Market Insights

Simplify the complex with our thought-provoking insights written by our global team of strategists.

Eye on the Market

Explore timely commentary on the economy, markets, and investment portfolios by Michael Cembalest.

Portfolio Insights

Get perspectives and analysis from our investment teams to help guide portfolio decisions.

OUR EXPERTS CAN GUIDE YOU THROUGH PERIODS OF EXTREME TURBULENCE

LIQUIDITY INSIGHTS EYE ON THE MARKET MARKET UPDATES

LIQUIDITY INSIGHTS

Market & Portfolio Commentary

Read the latest review of Global Liquidity market and portfolio commentary across the Americas, Asia Pacific, as well as Europe and UK.

China’s interest rate pivot

The combination of a central bank policy pivot, better economic data and market technical factors contrived to end China’s bond bull market – but is the upward momentum sustainable, and what are the implications for investors?

Understanding zero interest rates

We examine how ZIRP works, its impacts, likely timeframe, whether we expect rates to go negative (spoiler: we don’t) and options available to liquidity investors.

Navigating through liquidity events and market volatility

Our investment team navigated through the recent market volatility and, with the help of our clients, weathered through the market storm.

A letter from our CEO John Donohue

Hear how Global Liquidity stayed steadfast in our commitment to clients over the past two months.

A look into Libor reform and current elevated spreads

Libor spreads are elevated, indicating cheapness in the funding markets, but we expect them to normalize in the near to medium term.

The Hong Kong Monetary Authority has stepped up

Learn from Global Liquidity Portfolio Manager, Aidan Shevlin, about latest monetary policies in Hong Kong and how that impacts HKD interest rates and investors.

At a pivotal moment, taking a deep dive into our USD government funds

Surging demand for U.S. Treasury bills (Tbills), in a “flight to quality” sparked by the coronavirus pandemic, created unusual market conditions.

Have money market funds lost their taste for buying?

Without support from central banks in the offshore space, Money Market Funds will likely be slow to get back up to full speed in purchases and duration, writes Olivia Maguire, Global Liquidity Portfolio Manager.

A Federal Reserve announcement provides temporary relief to banks on leverage and capital adequacy

A new rule on calculating the supplementary leverage ratio—a capital adequacy measure—allows expanded balance sheets and potentially greater expansion of quantitative easing.

What have the European Central Bank and the Bank of England done so far?

Olivia Maguire and Joe McConnell evaluate central bank reactions to COVID-19 in the UK and Europe.

Will the COVID-19 pandemic be worse for markets and the economy than the 2008 global financial crisis?

Learn from Global Liquidity Portfolio Manager, Kyongsoo Noh, about key differences between the market environment today and 2008.

The Federal Reserve keeps at it: New supportive actions this week

The Federal Reserve announced new programs on March 23, 2020. Learn from Global Liquidity Portfolio Manager, Kyongsoo Noh, on the latest facilities from the Fed.

If Only There Were a Federal Reserve App

Comments on the recent volatility and pace of monetary policy.

Making monetary policy: The Federal Reserve moves in the right direction

COVID-19 has the world on edge: What does this mean for short term fixed income?

COVID-19 has the world on edge: What does this mean for short term fixed income, volatility and cash investing, cash policy.

Markets' transition away from Libor

Libor, the world’s most widely used benchmark for floating rate instruments, is transitioning SOFR.

Resiliency statement: a message from our CEO John Donohue

We have extensive resiliency procedures in place to protect our employees, clients and businesses, ensuring we can continue to operate efficiently in times of stress.

Implications of COVID-19 outbreak for short term interest rates

The recent coronavirus (2019-nCoV) outbreak in China has increased investors’ trepidation and financial market uncertainty.

EYE ON THE MARKET

US vs Google, Europe vs COVID

We’ve all been focused on the election recently, but there are other topics worth covering since they will affect markets regardless of the election’s outcome: The United States vs Google, Europe vs COVID, and China vs US COVID aftermath.

Buckle Up

The problem with states that do not allow pre-election processing of absentee ballots; a COVID Rorschach test; Trump and Biden deficit explosions, equity market impacts and trends that are being priced in as Democratic Sweep odds rise; Vaccine timing & virus-sensitive businesses.

Election 2020 - Praying for Time

The election as referendum on America: how well does the “system” work, and for whom?

The Needle and the Damage Done

The cost of engineering a US recovery as the world waits for a vaccine; Biden agenda on taxes/spending; Tech stocks (2020 vs 1999); COVID and The Fountainhead; US election rules, dates and process in light of derogatory comments on mail-in voting by the President and Attorney General

COVID Charts of the week

Michael Cembalest, Chairman of Market and Investment Strategy, shares weekly insight and analyses on data covering the impacts COVID-19.

Blinded by science

Prospects for further US employment and profits growth are improving, but the US is now running the 3rd highest infection rate in the world. In infection hotspot states, governors are relying on falling mortality as the reason to make only minor policy adjustments. This week, we look at why mortality is diverging from infections and hospitalizations, and more broadly, at whether a US scientific trust gap has played a role in the recent infection surge.

2020 Energy Outlook

COVID temporarily reduced global CO2 emissions to 2006 levels. In our tenth annual energy paper, we examine when and how renewable energy transitions might result in more permanent reductions. We also analyze the financial, political and environmental risks to US energy independence, and whether stranded asset risk is the primary reason for the lowest oil and gas valuations in 90 years.

The Bounce

The US recovery; The flood of money and market returns; Globalization lives; Reducing COVID mortality through vascular treatments; Realistic timetables for never-been-done before vaccines; Sweden’s COVID experiment is not what you think

The Day After

Tracking the rebirth of the US consumer with real time data as a function of infection levels and state policy. Additional topics: no evidence yet of material second waves of COVID infection, and a round-up of the latest news on vaccine trials (Moderna, Oxford, Sinovac) and anticoagulants.

Zoom Room

In this week’s Eye on the Market, we review topics from our recent client Zoom calls. Topics include: risk of inflation, second waves of infection, the effectiveness of lockdowns and Biden’s taxation and spending agenda.

Ready or Not: The US prepares to reopen

An update on the COVID-19 crisis as the US prepares to reopen despite having one of the highest infection rates in the world. Additional topics: monoclonal antibodies and anti-viral trials; the growing gap between markets and the economy; S&P 500 earnings haves and have-nots; regional equity performance (Europe loses again) and leveraged loans at a time of rising bankruptcies.

State's Rights

In this week’s note, we discuss the latest news on US infection trends and reopening plans, Remdesivir trial results and whether US fiscal stimulus is “enough”.

Are we there yet?

Lockdown relaxation and economic reawakening…are we there yet?

COVID and culture

In this week's note, we take a close look at country and regional virus data, and examine the pitfalls of over-extrapolating trends that often reverse.

The equity rally and herd immunity

After the equity rally, P/E multiples are back at around 16x 2021 consensus earnings.

Man vs Nature Part II

Virus trends and head-fakes, convalescent plasma and U.S. vs. China lockdowns.

Man vs Nature: what the government can and cannot fix

There are things the government can try and fix during a pandemic and other things which it can't.

John Stuart Mill and the road from ruin to recovery

There are some difficult days ahead as quarantines and lockdowns grow. I want to share something with you from John Stuart Mill as we head into the unknown.

Coronavirus (COVID-19) research compilation

Michael Cembalest, Chairman of Market and Investment Strategy, has compiled his extensive research on coronavirus.

The pandemic gap

A lot of data is being made available on the coronavirus, but most of it requires careful analysis before drawing conclusions.

Berning Man

Confounding almost every forecast we saw last week, Senator Biden appears to have emerged from Super Tuesday with a sizeable delegate lead. Why might the night have turned out so differently from what was expected just a few days ago?

COVID-19 update

A Coronavirus update: severity, consequences and implications for investors.

Millions and Trillions

Answers to questions on the coronavirus, US megacap stocks, the cost of Democratic Healthcare plans, the Iowa caucus and the problem with the student loan system.

Rotten Tomatoes

Consensus reactions to the Phase I US-China deal are very skeptical, but may be missing the broader point. A brief note on what happened, and the alternatives.

Ghosts of Christmas Past

After a very positive year for investors in 2019, we expect lower positive returns on financial assets in 2020 as some Ghosts of Christmas Past reappear.

War of the Worlds

How a discussion about China and Hong Kong morphed into a chart war about Trump, Hoover, Taft, Rachel Maddow and Anderson Cooper.

The Armageddonists

While recessions and bear markets are a fact of life, something peculiar happened after the Global Financial Crisis: the rise of the Armageddonists.

Warren Peace

A close look at the Progressive Agenda, China’s deteriorating welcome mat in DC and US Tech IPOs.

Active Management and QE-distorted markets

Michael Cembalest analyzes the performance of over 6,700 domestic and international active equity managers and discusses the challenges they face.

Cold Turkey

A brief comment on a proposal from leading Presidential candidates to ban hydraulic fracturing everywhere, immediately.

So long Yellow Brick Road

It was a long, hot summer at the Heritage Foundation. An update from the front lines of the Trade War.

Food Fights at the Fed and in the Leveraged Loan Market

The food fight between the President and the Fed Chair could result in too much easing, and the expansion of valuations beyond sustainable levels.

Lost in Space: The Search for Democratic Socialism in the Real World

Michael went on a search for Democratic Socialism in the real world, and ended up halfway around the globe from where he began.

Listen when people tell you who they are

Michael discusses how he should have taken Trump at his word on tariffs, and the impact of the widening trade war on global growth and equity markets as proposed tariffs approach pre-war levels.

Smoot Hardly

The US-China trade war, prescription drug price legislation and the 2020 election.

Energy Outlook 2019: Mountains and Molehills

Topics: unattainable objectives of the Green New Deal; overview of the world’s decarbonization challenges; Germany’s energy transition; Trump’s War on Science.

MARKET UPDATES

Confirmation Bias: How do we view U.S. over International Equities?

Over the last decade, there have been many trends in market leadership, such as large cap outperformance over small cap equities, growth over value equities, and U.S. over international equities.

How will the U.S. election impact international markets?

All eyes have been on the upcoming U.S. election. Its twists and turns have not only been affecting domestic markets, but also international markets, especially via the U.S. dollar.

What do election polls tell us?

Over the last four years, the frequent refrain about election polling is the polls were so wrong in 2016. But just how far off were the polls?

What does the future of energy look like?

As we think about the trajectory of the energy industry going forward, it is evolving in more ways than one.

Does DCA provide better returns than a lump sum strategy?

Discover the benefits of lump sum investing during the current low-interest rate regime, and its consistent outperformance of dollar cost averaging.

When should I dollar cost average?

For those investors feeling uneasy about markets, a DCA approach can help get those clients gradually get invested, says Jackson.

Substitution Bias: Is the disconnect between the economy and the stock market justified?

Many investors find this disconnect between the equity market and the economy perplexing and are constantly asking us: is it justified?

Which sectors perform best around an election?

As we approach Election Day, investors look to best position their portfolios for the next administration.

How should I position my portfolio if inflation comes back?

In recent months, the prospects of higher inflation has become front of mind for many investors.

Should I be worried about the stock market correction?

As we highlight in our 3Q20 Guide to Alternatives, core real assets like real estate and infrastructure can provide both diversification and income, while certain types of hedge fund strategies can zig when the stock market zags.

Recency Bias: How do current trends impact investment decisions?

After the dramatic market declines in March, many investors expected markets would continue to fall.

Are equities expensive?

The rebound from the late-March lows capped the shortest bear market in history and marked the fastest round trip back to all-time highs.

How might the election impact the municipal bond market?

With the presidential election just under two months away, investors are considering how a change in fiscal policies may impact the various sleeves of their overall investment portfolio.

Should I be worried about the market sell-off?

After a strong run, the end of last week saw U.S. equity markets come under pressure.

Is now the time to consider portfolio adjustments?

As the economy & markets continued to grind higher, investors entered into 2020 with prominent portfolio overweight’s into U.S. and Growth oriented equities.

Does the resurgence of COVID cases in Europe derail its investment story?

Fortunately, like the experience in the U.S., this second increase in cases is not being accompanied by the same rise in fatalities as the first.

The Fiscal Elephant in a Monetary Room

The Federal Open Market Committee officially announced an update to its Statement on Longer-Run Goals and Monetary Policy Strategy.

How would a corporate tax hike impact the recovery?

While markets are likely to experience volatility in the lead up to and the aftermath of the election, ultimately, it’s policy, not politics, that matter most.

Loss aversion: How does this impact investors now?

Loss aversion refers is the preference to avoid losing compared to gaining an equivalent amount.

Should I be positioned for higher yields?

Last week, we learned that the unemployment rate fell to 10.2% in July.

Where do we stand in the economic recovery?

Last week, we learned that the unemployment rate fell to 10.2% in July.

Will tensions between the U.S. and China keep rising?

It has become a near daily occurrence to awaken to headlines stating that “tensions between the U.S. and China are rising.

A good investor knows their tools

Part of being a good builder is knowing what tools to use. Is something being demolished? Get a sawzall and a sledge hammer.

How should current conditions be reflected in asset allocation?

The global economy appears to be in the early innings of recovery, while simultaneously staring down the limitations to growth in a pre-vaccine world.

We had a recession, now what about the recovery?

Last week’s GDP report showed that the U.S. economy contracted at a real, annualized rate of -32.9% in 2Q20.

How do we track the gradual recovery?

The U.S. economy contracted at its fastest pace on record in the second quarter, reflecting the nationwide lockdown and halt in economic activity.

Framing: How do investors interpret equity market returns over time?

Coming into 2020 – against a backdrop of steady and stable economic growth, along with a positive earnings outlook – many investors were worried about the market highs reached over the last few years.

2Q20 Earnings: Guide me to your profits

The second quarter saw one of the fastest stock market rebounds in history.

Is the EU Recovery fund a game changer for investing in Europe?

Over the past ten years, European equities have underperformed the U.S. by 174% pts in U.S. dollar terms.

Is the U.S. recession over?

The Business Cycle Dating Committee marked the peak month of the previous expansion in February 2020, officially marking an end to the longest expansion on record.

Is China’s recession really over?

China’s imposition of a strict quarantine in response to the COVID-19 pandemic plunged its economy into a deep contraction in the first quarter of 2020, -6.8% year-over-year, its first negative GDP print in over 40 years.

How disinflationary will prices be in the short term?

The dramatic increase in federal debt and the expansion of monetary policy has many investors wondering if a surge in inflation is on the horizon.

Should I be worried about a double-dip recession?

May and June saw economic activity improve relative to the April lows, and we expect that economic growth will be positive in the back half of the year.

Will fatalities spike as COVID-19 cases rise?

After crushing the curve in the U.S., cases of COVID-19 have begun to rise rapidly again, with the resurgence occurring in new hotspots.

Why should investors consider Sustainable Investing?

Due to COVID-19 and the discussions around social issues and climate change, Sustainable Investing (SI) is more relevant today than ever before.

What does a second wave mean for equity markets?

The past few weeks have seen COVID-19 case growth accelerate in parts of the United States, with the total number of confirmed cases now well above 2.5 million.

What is the outlook for the U.S. dollar?

Since the start of the year, the U.S. dollar has appreciated by roughly 1%, continuing a near-decade long trend that was only briefly interrupted in 2017.

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.

Will investing in European equities ever pay off?

Over the past 15 years, investors have been frustrated with the performance of European equities.

When will we finally see a market correction?

At the end of last week, it looked like the equity market pullback that everyone had been expecting was finally beginning to materialize.

How will the Fed’s forward guidance impact bond investors?

The Federal Open Market Committee (FOMC) met this week and provided investors with a fresh set of economic and interest rate projections after a six month hiatus.

What’s going on with stock market sentiment?

While fundamentals– valuations, earnings and economic growth – dominate in the long run, the short run is a different matter.

Have markets recovered from the COVID-19 recession?

Investors have had to process a torrent of information and wild swings in sentiment so far this year.

Monitoring the global impact of COVID-19

The spread of the coronavirus and its impact on global economic activity has materially changed the investment outlook for 2020. In this piece we provide a framework for tracking infection rates globally and monitoring the impact on economic activity.

Should I expect a market correction?

The S&P 500 has marched steadily higher from its March 23rd low against a backdrop of investor skepticism. In previous posts, we have discussed how this rally is being driven by three things.

Will the Fed cause inflation?

The balance sheet of the U.S. Federal Reserve (Fed) has increased by 2.9 trillion USD since the start of March, meaning that in just over eleven weeks it has grown more than it did in the five years following the Financial Crisis.

How will COVID-19 affect Sustainable Bonds?

Global governments have been swift and bold in supporting their economies, building a bridge to get consumers, small businesses and corporates over the present abyss to the other side. Given the unknown breadth and depth of the abyss, more stimulus may be required.

Has all EM behaved the same way this year?

Year-to-date, emerging market (EM) equities are down -17.6%, as a combination of the COVID-19 recession and the oil price shock has led to downward revisions to earnings expectations, as well as weaker currencies relative to the U.S. dollar.

Has the Fed done enough?

Ultimately, the Fed’s next step will be dictated by the pathway of the virus, says Dryden.

Should I go to the equity market for income?

In the aftermath of the global financial crisis (GFC), investors have embraced equity markets as a source of income. With the COVID-induced lockdown pushing policy rates back to the zero-bound and government bond yields near all-time lows, this trend has since gained additional momentum.

What opportunities were created by the COVID-19 earthquake?

During the first three weeks of March, investors stampeded out of riskier markets and rushed to safe assets. In the process, 100 billion USD flowed out of emerging market (EM) stocks and bonds –more than three times the outflows seen during each of the previous three risk-off periods.

A Dramatic Backdrop Shift: 2020 Election update

The next president will necessarily have a different policy agenda now given the events that have unfolded than he would have at the beginning of the year.

Impact of being out of the market

This edition of On the Minds of Investors comes from, Katherine Roy, our Chief Retirement Strategist here at J.P. Morgan Asset Management. Her team oversees The Guide to Retirement (GTR), which is a best-in-class resource for breaking down and simplifying complex retirement issues like Social Security and Medicare.

Infrastructure resiliency during the COVID-19 crisis

What is going on with earnings?

Nearly half of S&P 500 companies have reported 1Q20 earnings, and our current estimate is for a -20% decline relative to a year prior. Against this backdrop, however, equity markets have continued trending higher.

Is now the time to invest in small cap stocks?

Global markets have roiled in the face of COVID-19 and social distancing, and many investors are looking to “pick up the pieces,” eagerly hunting for the next big opportunity.

What does post-COVID leverage mean for investing?

While many changes are likely to emerge, one clear trend, with far-reaching macro and market implications, is the increase in leverage, says Azzarello.

Why are oil prices negative?

Earlier this week, oil prices turned negative for the first time in history, with WTI trading as low as -$37 a barrel.

What will the reopening of the economy look like?

Over the past two months investors have digested the COVID-19 shock: the fast spread of the virus around the world, the social distancing measures implemented and the resulting economic and earnings recession.

1Q20 earnings: Virus oddity

1Q20 earnings season will provide an important first look at how the ongoing pause in global activity is impacting corporate earnings.

What does COVID-19 mean for real estate?

The industries most impacted by social distancing account for 20% of payroll employment, and consumer spending across those industries account for 20% of GDP.

How will stocks rebound from COVID-19?

With the equity market having hit its last new high on February 19th of this year, the depth and speed of the market drop has been ferocious.

What are the risks and opportunities in high yield?

Today’s objectively complicated credit market may be an excellent source of future portfolio growth, says Dryden.

Who's buying and who's selling?

The recent U.S. equity market drop and subsequent swings in prices have been dramatic.

Will American small business fire its workers?

Ultimately, how high the unemployment rate gets is dependent on one key question: will American small business fire its workers, says Manley.

A COVID-driven spike in claims

Initial claims for unemployment insurance surged to the highest level ever: 3,283,000, spiking from a slightly revised 282,000 last week.

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.

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

The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity.

What will an earnings recession look like?

As economists continue to revise down their 2020 GDP estimates, a lot of clients have been asking us about the potential impact on earnings.

Can the Fed do more?

This past Sunday, the U.S. Federal Reserve (Fed) fired a last desperate salvo in an attempt to stabilize financial conditions, the second emergency inter-meeting cut in two weeks.

What policy response would help to stabilize markets?

Coming into this year, we expected an improvement in global economic growth, as 2019’s policy uncertainty clouds dissipated.

The investment implications of COVID-19: An update

The COVID-19 crisis confirms, once again, the value of a diversified portfolio, says David Kelly.

What does the latest oil price collapse mean for investors?

It is important to avoid trying to predict the future; rather, clients are best served by monitoring the present situation and maintaining composure.

Should I buy the dip?

There is not a clear answer. However, what we can provide perspective on, is where we are finding value, according to David Lebovitz.

How does Super Tuesday affect the election campaign ahead?

Former Vice President Joe Biden made a surprise comeback during the Super Tuesday contests, paving the way for a two-person race to the Democratic nomination.

Monetary medicine of limited effectiveness

Even with this Fed action, there will likely be calls for fiscal action to support to businesses suffering from the response to virus fears, says David Kelly.

Should I be concerned about the correction in U.S. equities?

Sentiment, and valuations, are likely to keep markets relatively contained until there is clarity about the extent and length of the outbreak, says Tyler Voigt.

What do you like more, value or growth?

Equity investors spend a lot time looking for where earnings growth will be strong; what doesn't get as much attention is what happens after they're generated.

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

"Equity investors spend a lot time looking for where earnings growth will be strong; what doesn't get as much attention is what happens after they're generated."

Should investors worry about the jobs market?

Taken at face value, the fall in job openings is concerning and warrants careful monitoring.

How sustainable is the interest in sustainable investing?

AUM growth and focus by investors globally suggest interest and adoption of sustainable investing is unlikely to subside anytime soon, says Samantha Azzarello.

The investment implications of the 2020 election

Investors should consider policies could impact markets and the economy after of the 2020 election.

What does the coronavirus mean for investors?

Financial markets have fallen sharply on concerns of the coronavirus, a respiratory illness first identified in Wuhan, China, spreading globally.

What is priced in to equity markets?

Equity market valuations have risen substantially in recent months, with the forward P/E ratio of the S&P 500 now at a level of 18.6x.

Should investors worry about inflation?

Investors are now asking whether inflation could return, threatening the rally in financial markets.

Should I wait to buy the dip?

Buying the dip - the coveted strategy (almost) all investors like to employ.

Will tensions with Iran cause an oil spike?

Rising geopolitical tensions with Iran have led to some fears over potential oil supply shocks out of the Middle East.

Why should I stay invested?

Rising geopolitical tensions with Iran have led to some fears over potential oil supply shocks out of the Middle East.

Funds

Solutions

Liquidity Insights

Market Insights

Portfolio Insights

Insights to empower better decisions

EXPLORE OUR FLAGSHIP INSIGHTS

Liquidity Insights

Market Insights

Eye on the Market

Portfolio Insights

OUR EXPERTS CAN GUIDE YOU THROUGH PERIODS OF EXTREME TURBULENCE

Copyright 2020 JPMorgan Chase & Co. All rights reserved.