The US dollar 'could be bottoming out' - JPMorgan
The US dollar "could be bottoming out," according to JPMorgan analyst Mislav Matejka's latest research note on Monday.
Matejka told investors in his February Chartbook that the long-duration trade is to consolidate. In addition, the firm said to stay long growth vs value, while they prefer the US over the Eurozone, remain Overweight Japan, and cautious on China.
"So far this year, US is ahead of International, Growth is outperforming Value, large caps are again beating small - Russell2000 is outright down on the year 3%, and China continued struggling," wrote the analyst. "We believe that this, ultimately unhealthy, high concentration and narrow leadership is set to continue until something breaks."
JPMorgan also believes that Federal Reserve rate cuts might still be over-discounted despite the recent hawkish repricing and the chances that inflation will pick up again.
"We believe our long duration call made in October will have legs in 2024, but have argued at the start of this year that yields will likely consolidate near term, and the USD could be bottoming out," stated Matejka. "Regionally, we have preferred US to international stocks since May of last year and don’t see that changing yet."
The analyst also reiterated the bank's downgrade of Banks to Underweight.
By Sam Boughedda