JPMorgan Expects Strong Performance in Economically Sensitive Stocks

Striking Analysis from JPMorgan

Mislav Matejka and his team of analysts at JPMorgan point out that cyclical sector earnings have lagged behind defensive sectors in recent years. However, they emphasize that a significant turning point may be on the horizon for investors.

Softening Inflation and Growth Expectations

The published report indicated that the softening inflation outlook suggests potential increases in bond yields that may be driven by strong growth expectations. This situation is expected to create a positive atmosphere for cyclical stocks.

Valuations and Earnings Potential

Analysts note that valuations appear unattractive compared to defensive sectors; however, if cyclical sector earnings increase, this may further boost demand for them. Experts predict that strong earnings could lead to significant gains for these stocks.