JP Morgan bullish on global markets in H2; rejects possibility of recession, sees inflation receding in second half

JP Morgan is positive about global equity markets in the second half of this year. The US-based multinational investment bank said that it did not see a possibility of recession as is being predicted and even expects inflation to reduce in the second half of the year. 

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In the coming week, quarterly rebalancing in stocks may lead to 7 per cent increase in market, the report further said.

The report further said that the in the event of unlikely recessionary scenario, the risky assets are now at very cheap valuations. JP Morgan, which is also a financial services company further opines that the market is currently at a significantly oversold position. 

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The stock markets are witnessing short positions at significantly high levels and not seen since 2008.  

On the quarterly basis, there has been 16 per cent correction in the broad-based equity.

The Outlook is expected to be very positive for the 2nd half, the JP Morgan report said.

Mainly, global growth is expected to increase from 1.3 per cent in the first half to 3.1 per cent in the second half, this report said.

Inflation rate is expected to decrease from 9.4 per cent annually to 4.2 per cent during the second half of the year. 

It expects a much higher growth for China from 0 per cent witnessed in the first half to jump to 7.5 per cent.

JP Morgan expects 7 per cent growth from the American market in a week.

These are some of the reasons why the investment bank is positive about the US markets and economy.