Daily Management Review

JPMorgan expects rally on exchanges despite Omicron spread


JPMorgan analysts predict that the spread of the omicron strain will not stop the rally in stock exchanges. They believe vaccines and new coronavirus drugs will help cope with it.

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JPMorgan strategists predict that the new strain of coronavirus will not stop the growth in the global stock market, writes Bloomberg.

According to the bank's analysts, "sporadic failures" such as the emergence of the omicron strain should be seen "in the context of higher natural and vaccine-acquired immunity, significantly lower mortality rates and new antiviral treatments". "We expect normalisation after the coronavirus to continue worldwide in 2022," they said.

Analysts forecast that the S&P 500 index will rise by around 9% from current levels, to 5050 points by the end of 2022. "We still see potential for market growth, albeit more moderate, thanks to higher-than-expected earnings growth, resolution of supply issues, improvements in China and emerging markets and normalisation of consumer habits," they wrote in their note forecasting the year.

Strategists expect European equities to perform better than US equities, investments in China will outperform emerging markets and emerging markets will outperform developed markets.

As a key risk to their optimistic outlook, they point to central banks' willingness to raise rates, rather than coronavirus,. Analysts at JPMorgan recommend a preference for energy and finance, consumer services and small cap companies. Analysts also favour healthcare over defence sectors.

source: bloomberg.com