JPMorgan’s Math Shows Why U.S. Stocks Can Keep Rallying
- Money managers are holding plenty of cash on the sidelines
- JPMorgan says equity allocations are still historically low
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Think the sizzling U.S. stock rally is excessive in an economy frozen by shutdowns? From one perspective, it’s just getting started.
Giant piles of cash sloshing around the financial system means there’s substantial ammunition yet to push risk assets higher. JPMorgan Chase & Co., meanwhile, sees potential for billions to flow into equities at the expense of bonds to rebalance portfolios. Money-market funds have lured $1.2 trillion this year, while fund managers with $591 billion overall are holding cash at levels rarely seen in history, according to Bank of America Corp.