The decision, as Bloomberg emphasizes, was justified by the impact of the conflict in the Middle East, which limits the growth potential of risky assets and negatively affects the global market.
The rest of the article below the video:
Fabio Bassi, leader of JPMorgan Chase's strategists team, pointed out that the key factor is the supply shock related to the interruption of the oil flow through the Strait of Hormuz.
“Geopolitical concerns and higher energy prices will reduce global economic growth and increase inflation in the long term” – Bassi wrote in a note to clients published on Friday, the content of which was quoted by Bloomberg.
He advised investors to maintain protection against declines in the stock market, emphasizing their importance in the current conditions.
Stock market under pressure
Since the outbreak of the conflict in the Middle East, the S&P 500 index has already lost 5.4%. in value, counting from the close of the session on February 27.
Read also: The American stock market will reach its lowest level in 2026. Inflation is worse than expected
On Friday, the index fell by 1.5%. to 6,506.48 points, which is the lowest result in six months. It was also the fourth straight week of declines, the longest such streak in over a year.
Despite the difficult situation, JPMorgan still predicts that the S&P 500 index may increase by 11%. until the end of the year. However, analysts warn that the market faces many challenges, including rising oil prices, which may reduce corporate profits.
Bassi noted that the price of oil at around $110. per barrel by the end of the year may reduce earnings per share in the S&P 500 index by 2-5%. compared to current forecasts.
Read also: Shares are falling sharply. See how the Polish stock exchange fares compared to the rest of the world
“The near-term risk to equities is more about multiple compression as investors reassess growth and liquidity, rather than a deep earnings recession,” he explained.
