It's too early to buy stocks - JP Morgan Asset Management
|Analysts at JP Morgan Asset Management are of the opinion that it is too early to buy equities as the market remains vulnerable to negative developments in the coronavirus crisis, according to Bloomberg.
The S&P 500, Wall Street's equity index and a benchmark for global stock markets, rose more than 10 percent last week, engulfing or erasing the preceding week's slide, as the Federal Reserve announced an open-ended asset purchase program and the US Senate passed the unprecedented $2 trillion fiscal stimulus package to contain the economic fallout from the coronavirus outbreak.
Key quotes
"I’m not yet confident in advocating overweight risk assets positions because you’re vulnerable in that scenario to a deterioration of the news on the medical front,” said Hugh Gimber, a global market strategist at JPMorgan Asset Management.
The policy measures have helped but they’re not on their own enough for us to call a definitive bottom in this market.
The full extent of damage to corporate profits remains unknown, making it dangerous to turn risk-on.
You want to be investing in companies that have the balance sheet flexibility to be able to handle this short-term hit to activity and come out on the other side the strongest.
The central banks will help solve the liquidity challenge for corporates, but they can’t help to solve the solvency issue for those more under-pressure names.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.