Mislav Matejka of JP Morgan has predicted a bearish scenario for global equities, citing lower prices and bond yields as the driving factors. The forecast, released on Friday, also points to a weakening services sector and an inverted US yield curve signaling potential recession.
The strong US dollar, historically associated with risk-off market behavior, is viewed negatively in this context. Matejka further posits that the underperformance of economically sensitive sectors suggests a policy error on the part of the Federal Reserve in overtightening monetary policy. According to his predictions, interest rates are expected to reach cycle peaks by Q4 2023.
JP Morgan identifies this period as an optimal time for investing in equities that benefit from lower bond yields such as technology, consumer staples, and utilities. This advice comes amidst a cost of living crisis that is affecting economies globally.
In related news, footwear company Birkenstock is planning a listing on the New York Stock Exchange (NYSE), while Games Workshop (OTC: GMWKF) has been highlighted as a promising stock by HillsideWealth's Jason Del Vicario and Steven Chen.
The Globe Investor Newsletter and Globe Advisor, supported by financial experts Mark Rendell, Tom Czitron, and Frederick Vettese, echo Matejka's sentiments on the importance of portfolio rebalancing. They emphasize the need to maintain a Yield Hog dividend growth portfolio in response to stubborn inflation and hawkish central banks.
The current economic climate underscores the importance of strategic investment decisions. As interest rates are projected to peak by the end of 2023, investors are advised to consider rebalancing their portfolios to include equities that are likely to benefit from lower bond yields.
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