- JPMorgan Chase (NYSE:JPM) sees the pessimism in equity and high-yield bond markets as overdone, as it sees only a 20% to 30% chance of a recession in 2019, with an increased probability in 2020, Bloomberg reports.
- The bank's strategists, led by John Normand, analyzed equity valuations and credit spreads for high-yield bonds in the period leading up to past economic recessions.
- The team continues to favor stocks over corporate bonds in developed markets and takes a neutral view on emerging markets.
- “It is right to anchor portfolio strategy in a late-cycle framework that anticipates below-average returns into and through the next recession, but we note it is also excessively pessimistic to price so much downside now as equity and HG credit markets are doing,” the analysts wrote.
- Previously: Stock end near lows for the day and week amid broad-based selloff (Dec. 7)
- ETFs: HYG, JNK, CRF, DHY, USA, HIX, EAD, PHT, HYT, HYLD, JQC, SCHX, ZF, ACP, ANGL, CIK, MCI, VV, DSU, SJB, KIO, NHS, CIF, ARDC, IVH, GGM, AIF, MPV, FHY, PHF, JSD, VLT, HYLS, DHG, FEX, PCF, JKD
- Now read: KKR Income Opportunities Fund At A 9.2% Discount To NAV
Original article