JPMorgan Chase & Co. (NYSE:JPM) maintained its notoriously bearish stance on equities, advising clients that stocks do not present an attractive investment opportunity at present.
The broker's market strategists pointed to a multitude of factors reinforcing this perspective, including high equity valuations, tight credit spreads, and persistent low volatility.
Moreover, the strategist highlighted the impact of restrictive interest rates expected to persist, elevated inflation, stretched investor positioning, consumer stress, and geopolitical uncertainty as reasons for the firm's defensive positioning.
In a client note, the strategist emphasized the lack of appeal in equities.
"We do not see equities as attractive investments at the moment and we don’t see a reason to change our stance."
The report also dismissed the potential of narrow market themes, such as artificial intelligence, to outweigh broader market challenges.
Along these lines, JPMorgan reiterated its recommendation for investors to be underweight in equities and credit, while suggesting an overweight position in commodities and cash.
The strategists acknowledged that this negative outlook on equities has adversely affected the performance of the firm's multi-asset portfolio over the past year.
However, this impact was partially mitigated by a favorable position in commodities and the benefits of high cash and fixed-income yields.
Despite the bearish view from JPMorgan, the S&P 500 Index has shown resilience, with an 11.3% increase in 2024, defying the strategist's expectations for a decline.