Bond Yields and Market Leadership

J.P. Morgan recommends buying market dips and tactically shifting into underperformed Low Volatility stocks as a hedge against bond yield volatility. The team maintains a bullish outlook on corporate profitability while warning that beta-heavy cyclical plays may stall due to softening economic data.

Key Takeaways

• 1.Maintain a 'buy the dips' stance on geopolitical volatility, supported by a strong corporate earnings outlook.
• 2.Low Volatility stocks offer a compelling tactical entry point regardless of the direction of bond yields.
• 3.The current economic environment is significantly different from 2022, with weaker employment expectations preventing a wage-price spiral.

Table of Contents

• Bond yields and market leadership
• Appendix
• Equity Strategy Key Calls and Drivers
• Top Picks
• Equity Flows Snapshot
• Technical Indicators
• Performance
• Earnings
• Valuations
• Economic, Interest Rate and Exchange Rate Outlook
• Sector, Regional and Asset Class Allocations

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