It’s prime time for the dip-buying crowd, JPMorgan said.
Analysts said they recommend buying any dips until at least 2026.
Economic growth, strong earnings, and the easing of key headwinds are bullish, they said.
In uncertain times, the simplest advice may be the best, and right now it might boil down to the old mantra: buy-the-dip.
Despite rising fears about the sustainability of the AI trade, JPMorgan is seeing an opportunity for investors. In a note to clients on Thursday, the bank said it …
It’s prime time for the dip-buying crowd, JPMorgan said.
Analysts said they recommend buying any dips until at least 2026.
Economic growth, strong earnings, and the easing of key headwinds are bullish, they said.
In uncertain times, the simplest advice may be the best, and right now it might boil down to the old mantra: buy-the-dip.
Despite rising fears about the sustainability of the AI trade, JPMorgan is seeing an opportunity for investors. In a note to clients on Thursday, the bank said it would be looking to buy the dip in any sell-off through the end of the year, including the big dip that markets saw this week on the back of tech-valuation fears.
“We would be dip-buyers into year end,” analysts led by Andrew Tyler, the global head of JPMorgan’s market intelligence team, wrote.
The analysts said they believe the bull market in stocks was still intact and expect the S&P 500 to “blast through” 7,000 over the “very near-term.” That implies the benchmark index jumping another 3% from its current levels.
Here’s why the bank remains so optimistic on the outlook for stocks:
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US growth looks like it will remain strong for a while, despite murmurings of a potential recession that have percolated around Wall Street in recent months.
Job market: With the government shutdown underway, investors still don’t have full insight into the strength of the US labor market, but there are positive signs that hiring is starting to stabilize, JPMorgan said.
Private employers added 42,000 jobs in October. That’s higher than the 25,000 economists expected, and an improvement from last month’s numbers, when the private sector shed 32,000 jobs.
Meanwhile, US employers announced over 153,000 job cuts last month, marking the worst October for layoffs in 22 years, according to Challenger, Gray & Christmas. But those cuts are still muted enough to likely not have a “material impact” on unemployment, JPMorgan said.
Services sector: The services side of the economy continued to expand last month, with the ISM’s Services PMI clocking in at 52.4% in October. That’s consistent with 2.5% GDP growth, a solid pace for the economy, the bank said, citing the ISM’s analysis.
GDP: The bank said it expects real GDP growth to be “above-trend” for the third quarter. Atlanta Fed economists expect quarterly GDP to clock in at around 4%, according to the latest GDPNow reading.
US companies have posted strong results for the third quarter, another factor that’s expected to prop up the market, analysts said.