Chilling 2024 S&P 500 Outlook: Why JPMorgan Projects Nightmare Scenario For Stocks
Portfolio Pulse from Piero Cingari
JPMorgan analysts project an 8% drop in the S&P 500 for 2024, forecasting the SPDR S&P 500 ETF Trust (SPY) to trade at pre-summer highs or October 2023 lows. The bearish outlook is based on high valuations, an aging business cycle, restrictive monetary policy, and geopolitical risks. The bank warns of a potential 30% fall in EPS during the next economic slowdown and advises sectoral shifts, recommending overweight positions in energy, consumer staples, healthcare, and utilities, while suggesting neutral or underweight positions for other sectors.
November 30, 2023 | 5:44 pm
News sentiment analysis
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NEGATIVE IMPACT
JPMorgan predicts an 8% fall for the S&P 500 in 2024, which would directly impact SPY as it tracks the index.
As SPY directly tracks the S&P 500, JPMorgan's bearish forecast for the index implies a similar performance for SPY.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
JPMorgan's underweight recommendation for industrials could negatively impact XLI.
An underweight position in industrials by JPMorgan could lead to a decrease in XLI's value, which tracks industrial companies.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Real estate's underweight recommendation by JPMorgan could lead to a negative impact on XLRE.
The underweight recommendation for the real estate sector suggests a bearish outlook for XLRE, which focuses on real estate stocks.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Consumer discretionary's underweight recommendation by JPMorgan suggests a negative short-term impact for XLY.
JPMorgan's underweight stance on consumer discretionary could result in a downward trend for XLY, which represents this sector.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Neutral weight for materials by JPMorgan indicates a neutral short-term impact on XLB.
JPMorgan's neutral stance on the materials sector suggests that XLB, which represents materials stocks, may not experience significant price movement in the short term.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Neutral weight on communication services by JPMorgan suggests no significant short-term impact on XLC.
With a neutral recommendation for communication services, XLC is expected to maintain its current trajectory in the short term.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
JPMorgan's neutral weight recommendation for financials indicates a neutral impact on XLF.
A neutral weight stance on the financial sector by JPMorgan implies no significant short-term movement for XLF.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
JPMorgan's neutral recommendation for tech could mean a stable short-term outlook for XLK.
The neutral position on tech by JPMorgan suggests that XLK, which tracks the tech sector, may not see significant short-term price changes.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
JPMorgan recommends an overweight position in the energy sector, which could benefit XLE.
JPMorgan's sectoral shift recommendation to overweight energy suggests a positive outlook for XLE, which focuses on the energy sector.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
JPMorgan's overweight recommendation for consumer staples could positively impact XLP.
With JPMorgan advising an overweight position in consumer staples, XLP is likely to benefit as it represents this sector.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
JPMorgan's bullish stance on utilities suggests a positive short-term impact for XLU.
The overweight recommendation for the utilities sector by JPMorgan indicates a potential increase in XLU's value.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Healthcare sector's overweight recommendation by JPMorgan could lead to a positive impact on XLV.
JPMorgan's recommendation to overweight the healthcare sector suggests a bullish view for XLV, which tracks healthcare stocks.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80