A JPMorgan indicator is sending a resounding buy signal on U.S. stocks after hitting a threshold that typically leads to above-average gains.
A team led by J.P. Morgan\’s head of U.S. market intelligence, Andrew Tyler, said in a report on Wednesday that the bank\’s U.S. tactical positioning indicator, which measures clients\’ exposure to U.S. stocks, hit levels that suggest the S&P 500 is attractive.
The report said that after a similar four-week position adjustment, the S&P 500 usually rises by about 3% in the subsequent 20 days.
U.S. stocks are up so far this week as strong corporate earnings boosted the S&P 500.
The index had previously fallen for three consecutive weeks amid concerns that interest rates will remain high in the coming months.
The stock market spotlight this week is tech giant Meta Platforms Inc. Microsoft and Alphabet Inc. will release results after the market close on Wednesday. Announced Thursday.
On Friday, the key inflation indicator, the personal consumption expenditures price index, will be released. Investors will look for signs that price pressures have cooled.
The tactical rally appears poised to continue. The key will be this week\’s big tech earnings and the personal consumption expenditures price index, Tyler writes.
If all of these are in place, you may see the market surge upwards. But it will feel as though the \’buy the dip\’ has kicked in.
He said that the current pattern is similar to August and October last year. U.S. stocks also rebounded after that.
Earlier this week, Marko Kolanovic, chief market strategist at JPMorgan Chase, said in a note to clients that as macroeconomic risks such as rising bond yields and rising oil prices rise, the stock market decline is not over yet.
JPMorgan\’s trading desk says U.S. stocks are ripe for further gains
A JPMorgan indicator is sending a resounding buy signal on U.S. stocks after hitting a threshold that typically leads to above-average gains.
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