Emergency Bullish Turn Before Nonfarm Payrolls, JPMorgan Returns to US Stocks with Focus on Tech Sector

Odaily News: Ahead of the release of the US September nonfarm payrolls report, JPMorgan's trading desk chose to end its previous tactically neutral stance on US equities and shifted back to bullish.

The bank believes that stronger-than-expected US economic activity, resilient consumers, steady corporate earnings growth, and bond yields potentially gradually finding a new equilibrium level make the short-term environment for US equities more favorable than before.

Andrew Tyler, JPMorgan's head of US market intelligence, said in a client note on Monday that as bond yields stabilize, while oil prices may still be volatile but could gradually pull back, the combination facing the market is improving. He believes that economic growth and corporate earnings remain sufficient to support risk assets.

This also marks a clear shift for JPMorgan's trading desk over the past month. At the end of August, after Federal Reserve Chairman Warsh delivered hawkish signals at Jackson Hole, the market quickly raised rate hike expectations, and Tyler lowered his tactical view on US equities at that time. Even earlier, he turned cautious in early June, after which US stocks underwent several weeks of adjustment.