economy
What to buy and sell depending on outcome of U.S.-Iran deadline, according to JPMorgan
In the event of a ceasefire, the JPMorgan trading desk sees technology, consumer and financial stocks rallying.
TL;DR
- JPMorgan has a trading strategy ready for the U.S. deadline regarding Iran's Strait of Hormuz.
- A ceasefire scenario suggests rallies in the Russell 2000, Nasdaq-100, S&P 500, technology, and cyclical stocks, particularly consumer discretionary plays.
- Financials could experience a multi-week rally with an improving macro background and strong earnings expectations in a ceasefire outcome.
- Emerging markets, especially the Asia Pacific region, are preferred over developed economies if a deal is reached.
- If civilian infrastructure is attacked, energy assets like oil futures are expected to rally, along with defense companies and fertilizers.
- In a highly bearish outcome, JPMorgan foresees an 'indiscriminate selling' or 'Puke Everything' trade.