Global investment bank JP Morgan made a bold pivot on the US economy in a recent note from their trading desk citing that the stock market will turn bullish. The bank renewed optimism for equities as the geopolitical conflict in the Middle East is cooling down. The tension between Iran and Israel appears to be a thing of the past as Trump is not keen on attacks.
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The focus is now shifting on the US stock market and JP Morgan predicts a bullish phase for the economy. The investment giant reclassified their “tactically bullish” outlook citing various factors, including wars and changes in geopolitics. It wrote in the note that macroeconomic trends indicate an uptrend in corporate earnings that could boost equities. The softening of global trade tensions is also among the reasons for the bullish outlook.
JP Morgan Says US Stock Market Will Become Bullish
JP Morgan noted that the stabilized global dynamics will uplift the US stock market generating further gains this year. The expiration of key tariff exemptions could make the US economy boom making the flow of trade turn normal. “We shift our view back to Tactically Bullish with the bullish hypothesis based on resilient macro data, positive EPS growth, and thawing trade war rhetoric,” the bank wrote.
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Dow Jones, Nasdaq Composite, and the S&P 500 index have all headed north this month despite the global conflicts. Nasdaq and Dow Jones have spiked more than 700 points in a month while the S&P 500 has surged by 170 points. This is the bullish it has ever been this year and JP Morgan is capitalizing on the US stock market boom.
However, despite JP Morgan being bullish on the US stock market, not all Wall Street analysts agree with the term. Stifel strategist Barry Bannister said that the economy could experience a downturn during the second half of the year. “We think there’s going to be a consumer slowdown. As the consumers pull back, precautionary savings go up, consumption slows,” he said in an interview with CNBC.
