3 things that must happen to get bullish about stocks again: JPMorgan
The hurdle to buying stocks amid the current Trump tariff policy-driven market rout is very high.
That's the warning from JPMorgan's head of global equity strategy Mislav Matejka.
"In order to be sustainably buying equities, beyond just technical bounces, we would need to see trade news flow to settle — for retaliations to be out of the way, also a reversal in fiscal consolidation drive, where certain departures from current administration would need to happen, and would need to see Fed capitulation, but that is likely only after the payrolls falter," Matejka wrote in a note on Monday.
US markets are "not a good place to hide," Matejka warned. Tech stocks and the US dollar should not be viewed as relative safe-haven plays right now.
"We believe that one should stay cautious on risk," Matejka added.
Markets have shed an astounding $5.4 trillion in value in the two days since President Trump revealed big-time tariffs on major countries last Wednesday. The S&P 500 (^GSPC) is now at its lowest level in 11 months, with pros saying the carnage may not yet be over.
Read more: How to protect your money during economic turmoil, stock market volatility
Heavy selling continued in markets around the world on Monday.
Tokyo's Nikkei 225 (^N225) index tanked 7.8%. Hong Kong's stock market nosedived about 12% in its worst day in more than 16 years. China's Shanghai Composite Index lost 8.4%.
Futures on the Dow Jones Industrial Average (YM=F) dropped more than 1,100 points.
Buzzy numbers in the markets are starting to surface during the carnage.
For instance, the S&P 500 is down 17% from its February highs — a stone's throw away from entering a bear market by being off 20%.
Including dividends, the S&P 500 is now down 13.4% so far in 2025, according to data crunched by Creative Planning chief markets strategist Charlie Bilello. Since 1990, only two years have had a worse start: 2001 and 2020.
Every stock in the closely followed "Magnificent 7" is down by more than double-digit percentages this year, led by a 40% plunge in Tesla (TSLA). Nvidia (NVDA) is a close second with a 30% drop.
"I'm already overweight utilities, which is expensive," RBC Capital Markets strategist Lori Calvasina told Yahoo Finance. "So we want to hunt for bargains. But for a lot of these sectors, it's hard to say what reasonable EPS assumptions are. All I know is that there are some sizable downward revisions coming."
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
18 minutes ago
- Yahoo
'When He Least Expects It': Michael Cohen Warns Elon Musk Of Trump's Revenge
Michael Cohen, former longtime personal attorney to Donald Trump, on Sunday warned Elon Musk that the president isn't done with him yet. 'They're going to really go after Elon Musk like nobody has seen, ever, in this country because they can,' he said on MSNBC on Saturday. 'And one thing Elon doesn't understand is this political guerrilla warfare that they're going to conduct against him.' Cohen warned that Trump can use the power of government to target Musk's companies and even his citizenship. Musk and Trump last week had a spectacularly public falling out, and over the weekend the president slammed his one-time pal as 'very disrespectful' and warned him of 'serious consequences' if he supported Democrats. Cohen said that while Trump has also downplayed the feud, the president is likely already plotting against the billionaire behind the scenes. 'I just wish him well,' Trump said on Friday. 'No he doesn't,' Cohen said. 'Because while Elon Musk is taking a step back thinking Trump is taking a step back, what Trump is actually doing is weaponizing the Department of Justice through his attorney general and other people, and they are gonna drop the hammer on him out of nowhere when he least expects it. That's the playbook.' See more of his conversation with MSNBC's Ali Velshi below:
Yahoo
19 minutes ago
- Yahoo
Citigroup drops July rate cut bets for US, trims forecast to 75 bps
(Reuters) - Citigroup has pushed back its U.S. rate cut forecast to September from July and now expects three cuts this year instead of four, after a stronger-than-expected May jobs report in an otherwise cooling labor market. The Wall Street brokerage anticipates 75 basis points (bps) of cuts this year in three equal tranches in September, October and December, revising its earlier forecast of 100 bps of cuts. The brokerage also forecast two rate cuts of 25 bps each in January and March of 2026. The Federal Reserve's last rate cut was in December 2024, when it reduced the key lending rate by 25 bps. U.S. non-farm payrolls increased by 139,000 jobs last month after a downwardly revised rise of 147,000 in April, data showed. Economists polled by Reuters had estimated May payrolls to rise by 130,000 jobs. The U.S. central bank is expected to keep interest rates unchanged at its meeting next week, while traders have priced in close to two 25-bps cuts by December. On Friday, Citi lifted its S&P 500 year-end target to 6,300 from 5,800 earlier, expressing renewed optimism in corporate earnings resilience and the accelerating momentum of artificial intelligence-driven growth. The benchmark S&P 500 index closed above 6,000 for the first time since late February on Friday. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
San Francisco Chronicle
23 minutes ago
- San Francisco Chronicle
China says its exports to the US fell nearly 10% in May, as trade talks are due to start in London
China's exports to the United States sank fell nearly 10% in May from a year earlier, new customs data show, adding to pressure on the world's second largest economy as a new round of trade talks with Washington was due to start later Monday in London. China's total exports rose 4.8% last month, slowing from an 8.1% year-on-year increase in April. Imports declined 3.4% year-on-year, leaving a trade surplus of $103.2 billion. China exported $28.8 billion to the United States in May, while its imports from the U.S. fell 7.4% to $10.8 billion, the report said. Still, exports to Southeast Asia and the European Union remained robust, growing 14.8% and 12%, year-on-year. Exports to Thailand, Vietnam and Indonesia were sharply higher, and exports to Germany jumped more than 12%. 'The acceleration of exports to other economies has helped China's exports to remain relatively buoyant in the face of the trade war,' Lynne Song of ING Economics said in a commentary. Many businesses had rushed orders earlier in the year to try to beat higher tariffs. Once new import duties took effect, shipments slowed. Exports will likely rebound somewhat in June thanks to a 90-day suspension of most of the tariffs China and the U.S. imposed on each other in their escalating trade war, Zichun Huang of Capital Economics said in a report. 'But with tariffs likely to remain elevated and Chinese manufacturers facing broader constraints on their ability to sustain rapid gains in global market share, we think export growth will slow further by year-end,' Huang said. Despite the tariffs truce, rancor between Beijing and Washington has persisted, with angry exchanges over advanced semiconductors, 'rare earths' that are vital to many industries and visas for Chinese students at American universities. The round of negotiations due to take place later Monday in London follow a phone call last week between Trump and Chinese leader Xi Jinping. It's unclear if that exchange will lead to any significant progress during the talks this week. Speaking to reporters on Air Force One on Friday, Trump said Xi had agreed to restart exports of rare earth minerals and magnets to the U.S. which China had slowed, threatening a range of U.S. manufacturers that relied on the critical materials. There was no immediate confirmation from China. The trade data released on Monday showed a nearly 21% plunge in the value of China's rare earths exports in January to May compared with a year earlier. In terms of volume, those exports rose 2.3%. Similar trends can be seen in exports of other products and commodities, such as shoes, ceramics and cell phones, as slowing demand causes prices to fall. Other data released Monday highlighted the pressure on China's own economy from slowing exports. Imports have faltered since manufacturers import many of the components and materials needed for the goods they assemble for the world. At the same time, China's own domestic markets are suffering. The government reported that consumer prices fell 0.1% in May, evidence of sluggish demand. The persisting deflation partly reflects lower food prices, economists said.
