Market news
02.12.2019, 10:00

JPMorgan sees global economic pick-up spurring mediocre returns

JPMorgan Chase & Co. strategists see next year’s expected global economic pick-up generating sub-par returns across the fixed-income, currency and commodity complex.

Developed-market bonds, as might be expected, will be laggards, with JPMorgan projecting losses in the single-digit percent range. More surprising might be the single-digit losses in commodities. Investors will get gains elsewhere, but not to the same extent typically registered in economic rebounds, the bank says.

Investment-grade credit -- where premiums are already low -- will see single-digit gains, while U.S. high yield and emerging-market credit will record mid-to-high single digit percent gains, according to JPMorgan.

“This isn’t the sort of return spectrum most would expect at a major turning point in the global economy,” JPMorgan strategists said. “The cause is an unusual macro and policy environment combined with high valuations in most of FICC.”

When global growth improved following a mid-cycle slump in the past -- as in 1995, 1999, 2012 and 2016 -- defensive assets delivered below-average or negative returns, while cyclicals such as credit, emerging markets and commodities posted above-average ones, according to JPMorgan’s analysis.

“Even if the more cyclical sectors of FICC beat bonds and cash next year, there wouldn’t be much precedent for the entire FICC spectrum to return less than their historical average,” the team wrote.

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location