JPMorgan awaits the mitigation of policy risks

According to announcement of JPMorgan analysts, the mitigation of policy risks is expected.

The company still considers growth of Asian market as a support of the global trade cycle and low investor positioning as a certain floor to the market.

However, the analysts repeated some of their comments made last week and once again highlighted their growing concern on the policy error of central banks, considering the recent strengthening of hawkish rhetoric. But also, they pointed to “new geopolitical risks occurred as consequences of the Nord Stream pipeline destruction happened about a week ago”.

Despite the fact that now the economic indicators are above consensus, all the aforementioned events might lead to a possible slowdown in the economic and market recovery, thereby endangering the company’s price targets for 2022 and delaying their achievement to 2023 or until the risks subside.

The analysts noted that equities proved to be “an effective class of real assets because their earnings are related to inflation”.

“If nominal GDP growth doesn’t decline sharply, growth of earnings should stay sustainable and shouldn’t decrease even in case of weak real GDP growth,” – the JPMorgan analysts added in their announcement.