JPMorgan strategist sees stocks bouncing back to record highs within next three years

JPMorgan strategist sees stocks bouncing back to record highs within next three years
JPMorgan Asset Management’s David Kelly says rebound is 'eminently doable' as the economy cools further.
AUG 12, 2022

JPMorgan Asset Management’s David Kelly says that stocks could rebound to record highs within the next few years as the economy shows signs of cooling.

“In order to be a bull on stocks, all you have to believe is that you’ll get there within, say, the next three years,” the chief global strategist said Thursday on Bloomberg Television. “And I think it’s eminently doable.”

Stocks have enjoyed a significant rally since hitting a low in mid-June. The benchmark S&P 500 index rose to a three-month high on Wednesday as investors speculated that the softer-than-expected July consumer-price reading would push the Federal Reserve to slow its aggressive policy-tightening regime that took stocks on a wild ride this year.

Kelly echoes this outlook.

“It’ll take a while to get inflation back down to 2%, but so long as we are making progress in that direction, there is no need to tip this economy into a recession,” Kelly said. “If you have a period where inflation is slowly coming down, the economy is trudging along but you’re able to maintain margins, I think it’s a pretty good outlook for the equity market.”

But stocks faltered on Thursday, even as a key measure of U.S. producer prices fell unexpectedly in July for the first time in over two years, as some investors wondered if the rally that followed the CPI data went too far. For Kelly, though, the combination of softer inflation readings and signs of an economic slowdown may lower the peak for interest rates, supporting higher equity prices.

“I would be fully invested in equities at this point because I do think that equities can move higher here,” he said.

What's driving advisers' increased adoption of alternatives?

Latest News

Fintech bytes: Envestnet reaffirms $1B RIA commitment with Tamarac tech investment
Fintech bytes: Envestnet reaffirms $1B RIA commitment with Tamarac tech investment

Also, Orion has added BlackRock, Fidelity, and Vanguard to its custom portfolios suite, and RedBlack has set up a new headquarters after crossing a trillion-dollar milestone.

RIA moves: Maridea acquires multigenerational practice in Pennsylvania debut
RIA moves: Maridea acquires multigenerational practice in Pennsylvania debut

Also, New York-based Legacy Edge Advisors names its first-ever CEO, while Novare Capital Management hires a Vanguard veteran with a multigenerational planning focus.

Private equity eyes 401(k) plans, but fees remain a hurdle
Private equity eyes 401(k) plans, but fees remain a hurdle

Asset managers are racing to bring private market products to retirement plans, but cost and liquidity concerns linger.

IRS floats proposal ending tax breaks for schools that weigh race
IRS floats proposal ending tax breaks for schools that weigh race

Treasury's latest tax-exemption crackdown on private schools lands in the wake of a separate push to restrict refundable credits for some immigrant filers.

Trust over tech:  The hidden signal of stock success in the AI era
Trust over tech: The hidden signal of stock success in the AI era

Workforce trust measures predicted which companies came out ahead during COVID-19. The same dynamic may now be playing out across the AI transition — and the data suggests the spread could be just as wide.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income