JPMorgan Asset Management’s chief global strategist advises investors to focus on valuations, invest in value stocks, sell crypto and stay out of bitcoin. He advises.” The Federal Reserve, he said, “is overestimating the strength of the U.S. economy because they feel guilty that inflation has risen on their watch.
JPMorgan strategists’ recommendations
David Kelly, chief global strategist at JPMorgan Asset Management, offers advice on what investors concerned about a hawkish Federal Reserve should invest in.
Following Federal Reserve Chairman Jerome Powell’s speech in Jackson Hole, Wyoming on Friday, he was quoted as saying:
The economy now has one foot in recession and the other on a banana peel.
“The economy is in a recession,” Powell was quoted as saying, “and we are in a recession, and we are in a banana peel. Powell said last week, “We will keep at it until we are sure the job is done.”
Also warning of “more volatility ahead,” Kelly stressed that investors should focus on defensive plays and valuations rather than short-term directions, such as investing in value stocks, long-term bonds, and income-generating alternatives.
Recommending that investors sell crypto while avoiding large tech stocks and bitcoin, the strategist advised:
make sure to overweight stocks with U.S. and international value and relatively low price-to-earnings ratios.
Kerry said the economy “will feel more normal” at the end of next year because of the high risk of recession. However, he cautioned that the real question is “how much damage the Fed wants to do to this economy.”
JPMorgan Asset Management’s chief global strategist further opined.
The Federal Reserve is guilty of rising inflation on their watch and overestimating the strength of the US economy.
Kerry also said Monday that the U.S. economy will “teeter on the edge of recession” until the Federal Reserve stops fighting to rein in inflation. He expects the Fed to raise the federal funds rate from its current 2.25%-2.5% to the 3.75%-4% range by year-end. After that, he said, “the Fed could stop raising rates and hope only that the economy avoids a recession.”
JPMorgan CEO Jamie Dimon warned earlier this month that “something worse” could come than a recession; in June, the executive said an economic hurricane was coming and advised investors to brace themselves.
This week, Goldman Sachs urged investors to buy commodities and worry about recession later. Goldman analysts stressed that “stocks could suffer as inflation remains high and the Fed is more likely to surprise hawks.”
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