JPMorgan Says Boost Your Risk Positions. And Unwind Those Hedges
- After Fed shift, favors U.S. high-grade in asset allocation
- Recommends going long U.S. stocks sensitive to China, trade
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The Federal Reserve’s pause on further tightening, and the chance of a positive surprise from China’s economy, have strategists at JPMorgan Chase & Co. beefing up risk-taking positions, cutting cash levels and favoring industrial metals.
The bank’s global strategists continue to favor equities relative to bonds, saying in a monthly report that markets are still some way off from fully pricing in less tightening from the Fed. With valuations more supportive, they scrapped hedges that helped cushion performance going into December. They lifted allocations to emerging-market stocks and bonds.