JPMorgan remains bullish on US stocks even though some observers warn that the economy is beginning to pay prices for President Donald Trump’s tariffs.
Banking banking forecasts that the S&P 500, Benchmark index of Wall Street, will yield a “high single-digit return over the next 12 months,” driven by three major factors.
One of the main reasons for the optimization is that markets do not care about the signs of a slowdown in the economy. Instead, merchants focus on the elastic income of the corporation and the subsequent economic recovery.
Because President Trump fired the First tariff salvo On April 2, economists dropped throughout the year’s US growth forecasts from 2.3% to 1.5%. However, the S&P 500 gained more than 28% in four months. The index lasts beyond the recent economic data that reveals softness to Labor Market and Consumptionas well as being sticky in the manufacturing and service sector Inflation.
While the Macro Analyst warning is about and likely to play in the background, US corporate revenues are ignoring the dangers of slowing down, at least for a short time, making it a second catalyst for JPMorgan’s bullish thesis.
More than 80% of S&P 500 companies recently reported their Q2 incomes, with 82% exceeded Revenue expectations and 79% beat revenue forecasts – the strongest performance since the second quarter of 2021.
The winners and defeated
According to JPMorgan, while Wall Street’s analysts were first expected income growth below 5%, the index is now at speed for a wonderful 11% growth rate. This stable display supports the ongoing bullish on the stock market.
“The whole year of revenue expectations for the same year and next have begun to be higher,” analysts at JPMorgan’s Wealth Management Says In a market note on Friday, the market was added that the winner was further different between the winners and defeated in the Trump War.
In addition, the market is now understanding and pricing where companies are restrained by most US tariffs. Right now, it looks like Mega corporations are just going to be fine. It can strengthen the case for further positive emotion in the markets.
JPMorgan analysts have explained that facing consumer and smaller companies with restrained bargaining power against their trading partners and strict supply chains are faced with a motionless perspective on income.
This relationship with JPMorgan’s final catalyst: Trump’s tariffs prove to be worse than its bite for large companies, managing to ensure exceptions and even tariff policies, aimed at sparkling a manufacturing boom, in a tail.
“The latest example is President Donald Trump’s suggestion that semiconductors import will be taxed at a 100% rate unless companies are committed to moving production in the United States. Another sign? Apple products are exempted from the latest tariff rates on India’s merchandise. In fact, the company has also announced an additional $ 100 billion investment US.
Large companies get more advantage from a big good gesture (OBBA). According to some analysts, the losses policy can increase free cash flow for some by more than 30%, which may be incentive to more investment.
The bank added that its investment strategy remains focused on the equities of large caps, especially in technology, financial, and utilities sectors, which it believes is best positioned to navigate the new economic environment.
The angle of crypto
JPMorgan’s positive outlook for stocks can be well -versed for cryptocurrencies, as both tend to switch to tandem. The Digital Assets market is happening a lot for itself, along with the Trump administration to appoint pro-crypto officials in key regulatory positions.
Recently, the US Securities and Exchange Commission (Sec) ruled out that liquid staking, under certain conditions, was falling out of Purview of security law. Decision has increased hope for staking spot ether ETFs that won regulation approved.
Ether rallied to more than 13% to over $ 4,200, reaching the levels last seen in 2021. Prices moved up nearly 50% last month, CoinDesk data show.
