JPMorgan Analysts Say Rising Bond Yields Unlikely to Harm Equities Amid Earnings Growth
JPMorgan analysts suggest that rising bond yields are unlikely to derail equity markets as long as corporate earnings continue growing and inflation expectations remain stable. Despite macroeconomic headwinds such as higher oil prices due to the war in Iran, increased government borrowing costs, and potential central bank tightening, JPMorgan sees strong support for equities from ongoing profit growth. The report highlights that current conditions differ from 2022 when aggressive monetary policy led to a sustained drop in equity values. This time around, corporate earnings are on an upward trend, which could cushion the market against valuation pressures caused by higher yields. The analysts also note improving non-tech sectors and global manufacturing activity as positive signs. Investors should monitor upcoming central bank decisions for rate hikes, bond yield movements, oil prices, and inflation expectations to gauge potential shifts in sentiment.
Tickers: $JPM
Topics: bond yields central bank policy equity markets inflation expectations