‘A very different decade’ – JPMAM releases mid-year outlook

Asset Manager JPMAM has just released its mid-year outlook capturing current trends in the market and what the team’s expectations are.

According to JPMAM, 2023 is turning out to be a better year for economies than they had envisaged, but they still believe a recession is more likely than not. They comment: “given the rally we’ve seen in both stocks and bonds since the start of the year, we’re therefore more inclined to be well diversified with a focus on quality”.

In summary:

Markets are hopeful Goldilocks is on her way back – that inflation can slide back to central bank targets without a hit to growth. To JPMAM, this seems too good to be true. 

Economic weakness is – unfortunately – required to get rid of inflation. With risk assets no longer appropriately priced for the slowdown they see ahead, now is the time to focus on building portfolio resilience. 

Within equities, they favour an up-in-quality approach, a tilt towards resilient dividend payers, and the need to be especially careful in highly concentrated markets. 

Core bonds can once again diversify against recession risks that brings disinflation, but alternatives are also required for diversification against other tail risks. 

This will be a very different decade: we are in a new economic regime that will be defined by more frequent bouts of inflation. 

Readers can click here to read the JPMAM analysis in full.