JPMorgan Chase & Co.’s trading desk anticipates the current rally in US equities to continue, despite concerns about inflated share prices and the resurgence of meme stocks. Andrew Tyler, the bank’s head of global market intelligence, noted that even bearish investors are capitulating, suggesting bullish sentiment is growing. JPMorgan Chase & Co. is a global financial services firm, providing investment banking, asset management, and other financial services. The company’s trading desk analyzes market trends and advises clients on investment strategies.
Tyler believes that progress in trade agreements, favourable economic data, and renewed merger and acquisition activity will fuel the stock market’s ascent. From a technical perspective, the rally is supported by momentum unwinding and the challenges traders face in maintaining short positions. He suggested the market could experience a “significant step higher” if macroeconomic data remains strong and trade deals are solidified between the US and Europe, with China potentially following suit.
While speculative areas of the market, such as Cathie Wood’s Ark Innovation ETF and meme stocks, are experiencing significant gains, there are also fundamental factors supporting the bullish outlook. Applications for US unemployment benefits have fallen for six consecutive weeks, highlighting the labour market’s strength. Additionally, Alphabet’s strong earnings, driven by demand for artificial intelligence products, have boosted confidence in the technology sector.
Tyler recommends investing in megacap tech, cyclicals, and high-beta plays, while hedging with S&P 500 put options and products linked to the Cboe Volatility Index (VIX). Other financial professionals, such as Scott Rubner from Citadel Securities, also foresee a continued stock rally, advising traders to capitalise on the upside before hedging in the fall. Even Barclays acknowledges the market’s enthusiasm, suggesting clients use options to navigate potential swings.