Markets have climbed despite growing negative economic data since the federal government added a ton of stimulus into the economy. Have things bottomed out in the market? In a recent commentary regarding an asset allocation change, this is what JP Morgan, one of the Portfolio Strategists we utilize for client accounts, wrote…
While unprecedented policy responses from Congress and the Fed provided meaningful support to risk assets, we believe that the path of the virus and the timing of a vaccine will serve as the driving forces behind price action in the near-term. The flattening of the virus curve in the U.S., combined with the aforementioned policy responses, should continue to serve as tailwinds to risk assets, prompting us to add back to equity at the margin. However, as economies begin to reopen in a staggered fashion, we think risks ultimately remain skewed to the downside, keeping us slightly underweight equity in favor of high quality bonds.
