Latest news with #Matejka
CNBC
19-05-2025
- Business
- CNBC
JPMorgan upgrades emerging markets. How to play the improved outlook
Emerging market stocks couldn't catch a break the past four years. Now their fortunes may be turning. JPMorgan upgraded emerging markets to overweight from neutral on Monday. Strategist Mislav Matejka cited several reasons for the change, including easing trade tensions and attractive valuations. "De-escalation on U.S.-China trade front reduces one significant headwind for EM equities," Matejka wrote. "Big picture, the [year-to-date] increase in tariffs is still extremely large in a long term context. … We remain concerned about the impact of tariffs on medium term growth in U.S. and elsewhere; however, last week's news is clearly positive, especially for China." China and the U.S. agreed last week to temporarily lower tariffs as part of an attempt to negotiate a broader trade agreement. The news sent the iShares MSCI Emerging Markets ETF (EEM) higher by 3% last week — its fifth weekly advance in six. The strategist also noted that emerging markets are trading at 12 times forward earnings "and at a bigger than typical discount to" developed markets. The EEM exchange-trade fund is up 10.6% so far in 2025, outperforming the S & P 500's meager 1.3% advance. That's also better than the European Stoxx 600's 7.6% gain. EEM's 2025 advance puts it on pace for its best year since 2020, when it rose 15.2%. This performance also marks a stark contrast from the previous four years, when the EEM lagged both the U.S. and Europe. Check out how the fund — along with the S & P 500 and Stoxx 600 — did between 2021 and 2024: Declines during that time for emerging markets were led in part by China, as the country's economy struggled to recover following strict Covid-related lockdowns. EEM also suffered after President Donald Trump last month announced steep tariffs on dozens of countries. The fund has since recovered, however. Matejka highlighted India and Brazil as potentially notable EM winners. The iShares MSCI India ETF (INDA) is up nearly 4% year to date. EWZ , its Brazilian counterpart, has soared 24%.
CNBC
06-05-2025
- Business
- CNBC
The U.S. is 'not a good place to hide' in a slowdown, JPMorgan says. The Fed is on the clock
Federal Reserve Chair Jerome Powell and other members of the U.S. central bank are meeting Tuesday and Wednesday, trying to chart a path where the U.S. can avoid both a recession and sticky inflation. There are signs that Wall Street may be a bit too confident that the Fed will hit the mark without hurting the economy. JPMorgan strategist Mislav Matejka said in a note to clients Tuesday that, after a period of high volatility followed by a long winning streak, the U.S. stock market is still trading at optimistic levels. "[The S & P 500] is still trading at 21x forward, on 10% EPS growth expectation for this year, and 14% for next. That is far from pricing in any meaningful recession fears," Matejka said. .SPX 3M mountain The S & P 500 is well off its lows from early April. If the U.S. does fall into a recession, global economic growth will take a hit too, and take a bite out of foreign stock markets as well. But relative to historical patterns, the U.S. "is not a good place to hide," Matejka said. "If markets relapse into weakness, the US has typically held up better than other regions during risk-off periods, but this time around Tech and USD might not be the 'safe' havens," the note said. Some areas of the economy — most importantly the labor market — appear to be holding firm, meaning that a recession for the U.S. is still not a guarantee. But there does seem to be a growing fear that U.S. officials are running out of time to avoid a serious slowdown. The latest CNBC Fed Survey shows expected odds of a recession have jumped to 53% from 22% in January. The same survey shows the majority of respondents expect the Fed to cut rates when growth falls, even if there is upward pressure on inflation. And there are plenty of data points to hang those worries on. Supply chain data shows a sharp decline in both imports and exports from U.S. ports. Last week the Conference Board's consumer expectations index fell to its lowest level since 2011 . To be sure, using the price-to-earnings ratio of the stock market is not a perfect science, and the uncertainty around earnings makes valuation analysis "tricky for the time being," said Kevin Gordon, senior investment strategist at Charles Schwab. Still, that same uncertainty around trade policy can lead to real economic pain. "I wouldn't say we're priced for a recession right now, but there is a risk that the longer these delays roll on, the higher the likelihood that this economic weakness takes on a life of its own and can't necessarily be saved by some huge tariff announcement or some huge trade deal," Gordon told CNBC.
Yahoo
07-04-2025
- Business
- Yahoo
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
