(CNBC, Friday, July 26, 2019) – JP Morgan warns of a ‘significant’ sell-off in US stocks this quarter
Stocks in the U.S. have had a good run this year, but that could end as soon as this quarter, said Jasslyn Yeo, global market strategist at J.P. Morgan Asset Management.
That potential sell-off would be driven by a downward revision in earnings forecasts for next year, Yeo said.
U.S. stocks’ run up so far this year could end as soon as this quarter, a strategist from J.P. Morgan Asset Management warned on Thursday.
A potential sell-off would be driven by a downward revision in earnings forecasts for next year, predicted Jasslyn Yeo, global market strategist at the asset management giant.
The S&P 500 Index and Nasdaq Composite have jumped by more than 20% this year, and the Dow Jones Industrial Average isn’t far behind at around 17%.
Yeo told CNBC’s “Street Signs” she “won’t put a number” to the sell-off that she’s predicting, but said there will be “significant downside risk” for stock prices.
“In terms of timing, I think these two weeks will still be good for equity markets as we move into the Fed rate cut,” she said, adding that she expects the U.S. Federal Reserve to cut interest rates at its next policy meeting at the end of this month.
After that expected Fed move, investors are set to turn their attention to other factors that influence stock prices, such as corporate earnings, said Yeo. She explained that many analysts would start tweaking their earnings forecasts for 2020 in the second half of this year, so that would determine how stocks perform in the coming months.
“We think there could be a risk that (earnings) would head downwards,” she said.
Yeo is not the only strategist who has predicted an upcoming correction in stock prices. Earlier this month, Ian Harnett, chief investment strategist at Absolute Strategy Research, told CNBC a “really sharp correction” could come within the next 18 months.
Gold At Daily Highs
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2924175530478188)
(Kitco News, Friday, July 26th, 2019) – Gold market bulls have quickly brushed aside a slightly better-than-expected U.S. gross domestic product report Friday morning and have pushed prices moderately up and to new daily highs. The second-quarter GDP came in at up 2.1% versus expectations of up 2.0%, year-on-year. While today’s GDP report falls barely into the camp of the U.S. monetary policy hawks, who don’t want to see interest rates lowered, it’s doubtful the GDP data will change the minds of Federal Reserve officials who meet next week to discuss monetary policy. The FOMC is still expected on Wednesday to ease monetary policy with an interest rate cut. The U.S. dollar index rallied to a new high for the year following the GDP report, but again, the gold bulls ignored the development. August gold was last up $7.60 at $1,422.10.
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Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com