{"id":421370,"date":"2010-03-12T10:13:00","date_gmt":"2010-03-12T15:13:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/jpmorgan-the-uncertainty-is-over-keep-riding-this-risk-rally-2010-3"},"modified":"2010-03-12T10:13:00","modified_gmt":"2010-03-12T15:13:00","slug":"jpmorgan-the-uncertainty-is-over-keep-riding-this-risk-rally","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/421370","title":{"rendered":"JPMorgan: The Uncertainty Is Over, Keep Riding This Risk Rally"},"content":{"rendered":"<p><em>(This guest post previously appeared at the <a href=\"http:\/\/pragcap.com\/jp-morgan-add-to-risky-assets-as-uncertainty-fades\">author&#8217;s blog<\/a>)<\/em><\/p>\n<p>Love &lsquo;em or hate &lsquo;em few have ridden the recovery rally as well as JP Morgan&rsquo;s equity team.&nbsp; They continue to trade the rally from the bullish side (and the correct side).&nbsp; They say the strength of the recovery is underestimated and skeptical investors will slowly continue to pile into risk assets.&nbsp; Of course, they aren&rsquo;t the only big bank with a very positive outlook.&nbsp; <a href=\"http:\/\/pragcap.com\/blackrock-the-recovery-is-real-get-on-board\" >BlackRock recently released very similar commentary<\/a>.<\/p>\n<p>Just a few weeks ago JP Morgan said the concerns about China&rsquo;s tightening and Greece&rsquo;s debt fears were overblown and investors should buy the dip (<a href=\"http:\/\/pragcap.com\/jp-morgan-ignore-all-the-bad-news-coming\" >see here for more<\/a>).&nbsp; But this doesn&rsquo;t mean there aren&rsquo;t continuing risks to their outlook.&nbsp; Among the main risks are the following:<\/p>\n<ul>\n<li>Premature policy tightening<\/li>\n<li>Unfinished delevering.<\/li>\n<\/ul>\n<p>In terms of strategy, they are getting more and more aggressive.&nbsp; They like Greek government debt, US small caps and a tactical long in oil:<\/p>\n<ul>\n<li>Fixed income: Close shorts in US 2s, but stay short in the UK. Buy Greek government debt.<\/li>\n<\/ul>\n<ul>\n<li> Equities: Stay long, focused on small caps and cyclical sectors. We are reluctant to overweight EM equities despite their higher beta.<\/li>\n<\/ul>\n<blockquote>\n<p>In order of importance, we like most equities (small caps and cyclicals), then higher-yielding credits, followed by commodities (base metals), and rounded off with a small long in US HG. This strategy is not mega bearishbonds, where we trade tactically from the short side.<\/p>\n<\/blockquote>\n<ul>\n<li> Credit: Investors are becoming more bullish US HG spreads but have yet to adjust their positions. Stay long US HG.<\/li>\n<\/ul>\n<ul>\n<li> FX: Take profit on long USD positions against EUR, GBP, and commodity currencies.<\/li>\n<\/ul>\n<ul>\n<li> Commodities: Stay long commodities, favoring base and precious metals near term.&nbsp; They have a $90 year-end target on oil<\/li>\n<\/ul>\n<p>Source: JPM<\/p>\n<p><a href=\"http:\/\/pragcap.com\"><strong>Get more market commentary at The Pragmatic Capitalist &gt;<\/strong><\/a><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/jpmorgan-the-uncertainty-is-over-keep-riding-this-risk-rally-2010-3#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/sentiment-backflip-sp-now-saying-the-euro-could-threaten-the-dollar-as-reserve-currency-2010-3\">SENTIMENT BACKFLIP: S&amp;P Now Saying The Euro Could Threaten The Dollar As Reserve Currency<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/optimism-goes-viral-as-euro-becomes-unstoppable-2010-3\">Optimism Goes Viral, As Euro Becomes Unstoppable<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/feldstein-whats-happening-with-the-euro-is-an-overreaction-2010-3\">Feldstein: Forget The Euro, I&#8217;m Nervous About The Dollar<\/a><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/8OSfboVAhzg\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This guest post previously appeared at the author&#8217;s blog) Love &lsquo;em or hate &lsquo;em few have ridden the recovery rally as well as JP Morgan&rsquo;s equity team.&nbsp; They continue to trade the rally from the bullish side (and the correct side).&nbsp; They say the strength of the recovery is underestimated and skeptical investors will slowly [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-421370","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/421370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=421370"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/421370\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=421370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=421370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=421370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}