Gabriela Santos, JPMorgan Asset Management global market strategist, joins ‘Closing Bell’ to discuss the bull market rally, earnings season, and what’s next for the Fed and economy….(read more)
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As the global economy continues to recover from the impacts of the COVID-19 pandemic, there is a growing optimism that a period of increasing equity returns is on the horizon. With the earnings recession now seemingly behind us, investors are being encouraged to take on more equity risk, according to Gabriela Santos, Global Market Strategist at JPMorgan.
The term “earnings recession” refers to a period of consecutive earnings declines for companies within a specific market or sector. This is often a sign of economic weakness and can have a significant impact on investor sentiment. However, as economies bounce back from the pandemic-induced downturn, it appears that this troubling trend is starting to reverse.
Santos argues that with corporate earnings rebounding strongly in recent quarters, it is now an opportune time for investors to increase their exposure to equities. She highlights that the successful rollout of vaccines and the ongoing fiscal stimulus measures by governments have played a crucial role in supporting economic growth and boosting corporate profitability.
Furthermore, the accommodative monetary policies adopted by central banks have also contributed to the improved earnings landscape. With interest rates at historically low levels, companies have been able to access cheap capital, leading to increased investment and expansion.
Santos also points to the improving macroeconomic indicators as a positive sign for equity markets. GDP growth rates have exceeded expectations in many regions, unemployment numbers have dropped, and consumer spending has rebounded. These factors, combined with a synchronized global recovery, set the stage for companies to deliver strong earnings performance.
Taking a closer look at specific sectors, Santos suggests that technology companies and those in the cyclically sensitive sectors, such as energy, financials, and industrials, are well-positioned to benefit from this earnings rebound. These sectors have the potential to outperform as the recovery progresses and economic activity normalizes.
Of course, investing in equities always carries some level of risk, and Santos acknowledges this. However, she believes that the potential rewards now outweigh the risks, given the positive macroeconomic backdrop and improving earnings environment.
Investors should keep in mind that equity markets can be volatile and subject to sudden shifts in sentiment. Therefore, it is important to adopt a long-term perspective when considering equity risk. Diversification and a balanced portfolio approach can help mitigate potential downside risks.
As always, individual investors should conduct thorough research and seek professional advice before making any investment decisions. The opinions put forth by Gabriela Santos and JPMorgan should serve as a starting point for further analysis and not as a sole recommendation.
In conclusion, the earnings recession appears to be behind us, signaling a positive outlook for equity markets. With improving corporate earnings, supportive economic conditions, and favorable macroeconomic indicators, investors may find it beneficial to take on more equity risk. However, caution and careful analysis should still be exercised when considering individual investment choices.
I used to think every investor lose out during recession, meanwhile some make millions. I'm nonetheless considering whether to put $400k in my stock portfolio. What is the greatest approach to profit from the market?
We have been in recession for a while. It does not "show" because formulas have been changed.
August 2023 PMI came in at 47.6
No worries though. Thanks to the clown show we currently have, the economy is going to bet much worse.
In light of the impending recession and the fact that inflation is still far higher than the Fed's 2% target, several of the most prominent market analysts have been expressing their views on how terrible they believe the next downturn will be and how far stocks may have to fall. I need advice on what investments to make because I'm attempting to create a portfolio for my children that will at least be $850k in value.
"Substantially better data on the macro front, showing a normalization of the labor market, but not a collapse, so that can still support positive consumption-Gabriela Santos 8-31-2023"
Ah….of course. I'm going all in on orange juice futures. RANDOLPH!!!!!!
During a recession, despite its negative impact, there are potential opportunities for strategic investments in the market if approached with caution. Additionally, market volatility during such times can present short-term buying and selling opportunities. It's important to note that this is not financial advice, but rather an observation that cash may not hold the same level of advantage during these circumstances.
To manage investment risk, consider maintaining a broad diversification of your investments that reflects your personal risk tolerance, time horizon, and the nature of your financial goal. Remember, diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline. Because investing can be complicated, consider working with a financial professional to help guide you on your wealth-building journey.
Thanks bud for keeping us financially Educated! Regardless of how bad it gets on the economy, I still make over $13,000 every single week…
Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. A trader made over $350k in this recession influenced market
I really appreciate your clear and simple analysis of the financial trap. I lost so much money in the stock market, but now I'm making over $150,000 every week trading various stocks and cryptocurrencies.
She has intense eyes, great information
nail the poor to the cross, all is well.
Will CNBC ever bring on more logical guests? Niet
Just do the opposite what JP says and you will be fine.
JAJAJJAA. Bear market is over. Hiiiilarious.
This woman is always wrong
You guys should listen to this child..she’s onto something.
For first-time investors, it cannot be stressed enough how important it is to invest hard-earned money in the stock market rather than a bank where interest is guaranteed! The market appears out of control, the times are unpredictable, and the banks are deteriorating. Could there be a chance for a boomer like me? I'm working on a rough estimate of $5M for retirement, and I have a healthy six figures saved up for this. I'm almost 60.
We have been in a recession this whole year, a depression is what's coming next.
long china lady! pass.,
Most likely, an outside factor caused this recession. The US dollar's influence as a government reserve currency is waning for the first time in decades. The ability to control inflation is no longer possible, and less money is being spent on oil and stock trading than in the past. They all lend credence to the notion that a new multilateral international order is being developed.
she is dead serious, per her eyes lol
I came here to learn how to invest after listening to a guy on radio talk about the importance of investing and how he made $960,000 in 4 months from $160k, somehow this video has helped shed light on some things, but I'm still confused, I'm a newbie and I'm open to ideas.
she should be on reality showww
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly—which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $250k bond/stocck portfolio
Many moons ago Gabriela Santos recommended LVMH, (LVMUY) & it was another great call as it helped me retire early. Thanks again Mrs. Santos!
Hold SQQQ until mid 2024 or longer.
This will turn out to be a naive and foolish perspective.
The stock market rally run is gone, but I'm not sure if equities will swiftly recover, keep falling or swing in a narrow range for a few weeks, or if things will quickly get worse. I'm under pressure to increase my $450k reserve.
Freaky lady
Stonks only go up, buy the dip
she don't see the USA recession?? M2 money supply is shrinking, massive debt with continues to borrow money, banks are downgrading, inflation is high, and US Feds even have tough time selling US debt.
Delusional lady.
Like a leaf in the wind… no clear direction. And her estimates is without conviction
We will see good earnings during this holiday season in the US.
Several of the biggest market experts have been voicing their opinions on exactly how awful they think the next downturn would be, and how far equities may have to go, as recession draws closer and inflation continues well above the Fed's 2% objective. I'm trying to build a portfolio of at least $850k by the time I'm 60, therefore I need suggestions on what investments to make.
Gabriela Santos has great points!