The peak of this market rally is almost here, says JPMorgan. Time to ditch U.S. stocks, and buy these instead, says Wall Street giant. Last Updated: Feb. 14, 2023 at 9:56 a.m. ETFirst Published: Feb. 14, 2023 at 6:45 a.m. ET By Barbara Kollmeyer comments 13 Critical information for the U.S. trading day Are stocks near the peak? AFP VIA GETTY IMAGES Referenced Symbols TSLA -1.72% AMZN 0.12% GOOGL -1.38% META 0.11% DJIA -1.67% SPX -1.52% COMP -1.14% TMUBMUSD02Y 5.002% TMUBMUSD10Y 3.970% DXY 1.18% CL.1 -3.24% F -1.16% KO -0.76% MAR -0.84% AKAM -0.49% A -2.04% PLTR -0.18% CAR -1.99% IAC -2.93% TTOO -2.32% BBBY -1.80% GME -2.63% AMC -3.12% AAPL -1.51% APE 0.57% NIO -3.28% MULN -8.74% Roses are red, violets are blue, will CPI turn into the stock market’s Waterloo? The inflation data showed higher prices remain sticky, even if overall pressure eased a bit. The stock market seems to be in for a choppy day of action. @SIMON_REE Playing a sizable role in new year gains has been tech, though last week wasn’t great. Filings from hedge fund and other big money manager’s 13-F filings showed Soros Fund Management buying beaten-down shares of Tesla TSLA, -1.72%, while manager Seth Klarman increased stakes in Amazon AMZN, 0.12%, Alphabet GOOGL, -1.38% and Meta META, 0.11%. Read: Should investors‘ love affair with Tesla fade, here’s where they’ll shop next That is backward looking, but one wonders if they have kept that momentum up. Caution is the rule for our call of the day, from a team led by JPMorgan’s top strategist Marko Kolanovic, who says it’s time to stop buying U.S. stocks as investors overprice recent good news on inflation and remain “complacent of risks.” “We believe that the equity rally is unlikely to get the fundamental confirmation for the next leg higher. Once positioning recovers, Q1 is in our view likely to mark the high point of the market. We think that one should be using the [year-to-date] gains to cut equity allocations, and to reduce portfolio beta,” said Kolanovic and the team. They say international equities — China/EM, Japan and Europe — “offer better risk-reward than U.S. equities.” This latest warning adds emphasis to Kolanovic’s assessment last month that the rally’s days were numbered. Now hold on you say? Wasn’t this the guy who was bullish all of last year, to no great end? In JPMorgan’s defense, they say an underweight position on government bonds and overweight on commodities compensated for 9-month equity overweight last year, helping them edge past the benchmark. Still, Kolanovic might have a lot riding on this bet, as others on Wall Street chime in. Chris Montagu and the team at Citigroup, for example, told clients they see fading bullish momentum for stocks, apart from European banks. What JPM sees hurting this rally is recent weaker economic data and the anticipated weak earnings and guidance from the latest reporting season. “Recent equity inflows are likely running out of steam, while pensions’ overfunded status could drive an increase in their reallocation from equities to bonds this year,” they said. Markets are neither pricing in a recession, and trading as if the energy crisis, Ukraine war and sharp monetary tightening never happened, says Kolanovic. So they are shifting more defensively, moving slightly overweight on government bonds. They are also tilting investments to benefit from China reopening tailwinds — overweights in commodities, mostly energy and EM equities. Note, Bank of America’s latest fund manager survey revealed that bullish China equity positions linked to that reopening are considered to be the most crowded trade out there right now. Tread carefully. The markets Stocks DJIA, -1.67% SPX, -1.52% COMP, -1.14% are swinging around, pushing a bit lower post data as investors digest that CPI data. Bond yields TMUBMUSD02Y, 5.002% TMUBMUSD10Y, 3.970% are moving higher, while the dollar DXY, 1.18% flattens out and oil prices CL.1, -3.24% extend losses. For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily. The buzz CPI rose 0.5% in January, slightly above forecast, while it dropped to 6.4% on an annual basis, from 6.5% and against forecasts for a gain of 6.2%. Core CPI rose 0.4% and decelerated to 5.6% from 5.7%, against an expected 5.4%. More details here. Elsewhere, a survey showed small-business sentiment ticked up in January. Ford F, -1.16% is cutting 3,800 European jobs amid a shift to electric-vehicle production. Coca-Cola KO, -0.76% stock is up after beating revenue forecasts, while Marriott MAR, -0.84% shares are up after the hotel chain’s forecast beating results and upbeat outlook. Akamai Technologies AKAM, -0.49% and Agilent A, -2.04% are reporting after the close. Palantir Technologies stock PLTR, -0.18% is up 16% after the software company reported its first profitable quarter. Avis Budget shares CAR, -1.99% are up 5% after the rental car group posted higher revenue. IAC/InterActiveCorp. stock IAC, -2.93% is up after the brand holding company topped earnings expectations. T2 Biosystems shares TTOO, -2.32% are down 7% after the diagnostics company announced a public offering of common stock and warrants. It also reported positive data from T2Biothreat Panel that quickly detects biothreat pathogens. President Joe Biden is set to name Federal Reserve Vice Chair Lael Brainard as his economic-policy coordinator. Moldova temporarily closed its airspace, a day after its president accused Russia of plotting to overthrow the government. Best of the web “Keep going until you’re killed.” Russian soldiers increasingly being treated as cannon fodder in Ukraine as war drags on. Rescuers continue to find survivors of last week’s deadly earthquakes, some are working to save trapped pets. Swimming for their lives. Cyclone battered New Zealand declares a state of emergency. The chart As JPM pointed out, the market is behaving as if a war is not happening. Of course, it is over there, and really in the bull’s-eye more for Europe than the U.S., which has China and balloons to worry about. But here’s a chart from that Bank of America survey of fund managers that offers some food for thought. It shows that sticky, high inflation remains the biggest tail risk for investors, that is an event with a low probability of happening, but if it does, the damages could be outsize for markets. The second-biggest is geopolitics, and that’s as doubts grow of a peace accord between Ukraine and Russia in 2023 (expectations now down to 50% from 63% in January). The tickers These were the top-searched tickers on MarketWatch as of 6 a.m.: Ticker Security name TSLA, -1.72% Tesla BBBY, -1.80% Bed Bath & Beyond PLTR, -0.18% Palantir GME, -2.63% GameStop AMC, -3.12% AMC Entertainment Holdings AAPL, -1.51% Apple APE, 0.57% AMC Entertainment Holdings preferred shares NIO, -3.28% NIO MULN, -8.74% Mullen Automotive AMZN, 0.12% Amazon.com Random reads Historians crack 450-year old coded messages from a doomed queen. The Hobbit house this man accidentally built. Lovesick Americans spending $200 each this Valentine’s Day. Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. 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%% LOL\ they may be right JPM+ WFC looks like big sells this week; QQQ+ related must not have got the JPM note , looks somewhat up trendy OH well we never depended on JPM for our signals or ''peak, peak peak''
Oh wow, are we SERIOUSLY trying to put weight or credibility on JP Morgan? Before everyone forgets getting duped again... Let's just take a look back in past history on how analysis predictions by these banks and institutions have faired as recent as 2019. Something as stupidly easy to decipher like a 10-year treasury note should be simple enough. No financial statements to funge up or blame a CEO for. Easy-peasy stuff. Obviously, they all couldn't have been wrong... right?
%% LOOKS like it\ JPM is down YTD; SPY is Up nicely Year To Date. So they got one right I saw a homemade sign, written in red; Rind county watermelon festiVil ahead \ T Byrd/ Watermelon Crawl>2,177,888 video Views
%% Some good trending tech stocks on their list YTD; but APE is a penny stock, more like little alitle monkey. I guess JPM would feel a bit funny if they put out a '' sell on JPM stock ''LOL, Maybe they were trying to hint that way\market seemed to sell it that wayLOL. Geo political risk seems rather low; Evil Empire russia invaded Ukraine 52 weeks ago, chicoms threatened Taiwan for many years Could bounce @ 200dma, so maybe JPM is waiting on that late sell signal 200 dma on thier stock ??