JPMorgan is still optimistic for US actions, even when some observers warn that the economy is beginning to pay the price of President Donald Trump’s rates.
The investment bank giant predicts that the S&P 500, the Wall Street reference index, will produce a “single performance of a single digit in the next 12 months”, driven by three key factors.
One of the main reasons for optimism is that markets do not care about the signs of an economic deceleration. Instead, merchants focus on resilient corporate profits and subsequent economic recovery.
Since President Trump dismissed the first save of rates on April 2, economists have reduced the growth forecasts of the United States. UU. Still, the S&P 500 has gained more than 28% in the four months. The index has remained stable despite the fact that recent economic data that reveal softness in the labor market and consumption, as well as adhesion in the inflation of manufacturing and the services sector.
Although the warning of macro analysts is worrisome and is probably played in the background, corporate profits in the United States are ignoring the incoming risks, at least in the short term, which makes it the second catalyst for the bullish thesis of JPMorgan.
More than 80% of the S&P 500 companies have recently reported their profits from the second quarter, with 82% exceeding profit expectations and 79% exceeding income forecasts, the strongest performance since the second quarter of 2021.
Winners and losers
According to JPMorgan, while Wall Street analysts initially projected a profit growth below 5%, the index is now on the way to an impressive growth rate of 11%. This solid presentation supports the current upward trend in the stock market.
“The profit expectations of the whole year both for this year and for the next one have already begun to increase,” said JPMorgan’s analysts Wealth Management in a market note on Friday, and added that the market is becoming increasingly differentiated between the winners and the losers of the war works in Trump.
In addition, the market is now discovering and the prices in which companies are being affected by US rates. Until now, it seems that the mega corporations will be fine. This could reinforce the case for a greater positive feeling in the markets.
JPMorgan analysts explained that smaller and consumer -oriented companies and smaller companies with restricted negotiation power against their commercial partners and rigid supply chains face a stagnant earning perspective.
This is related to the last JPMorgan catalyst: Trump’s tariff cortex is proven to be worse than his bite for large companies, which manage to ensure exemptions and even convert tariff policies, aimed at generating a boom of manufacturing, in a tail wind.
“The last example is the suggestion of President Donald Trump that imported semiconductors would be taxed at a 100% rate unless the companies commit to relocate production to the United States. Another sign of Apple products are exempt from the latest rates of Indian goods. In fact, the company also announced an additional investment of $ 100 billion in the manufacturing facilities of the United States.
Large companies obtain an additional advantage of the One Big Beautiful Act (OBBA)under which companies can claim a 100% bonus depreciation for the purchases of qualified commercial properties and immediate expenses of national research and development costs. According to some analysts, depreciation policy could increase free cash flow for some by more than 30%, which could encourage more investment.
The Bank added that its investment strategy focuses on the actions of great capitalization, particularly on the sectors of technology, finance and public services, which believes that they are better positioned to navigate this new economic environment.
The cryptographic angle
JPMorgan’s positive perspective for actions could be a good omen for cryptocurrencies, since both tend to move together. The digital asset market has many things for themselves, with the Trump administration by appointing Pro-Crypto officials for key regulatory positions.
Recently, the US stock and values commission. UU. (SECOND) He ruled that the liquid reference, under certain conditions, is beyond the reach of the Securities Law. The ruling has raised the hopes of rethinking the regulatory approval of ETF of ether.
Ether has recovered more than 13% to more than $ 4,200, reaching levels last viewed by 2021. Prices increased almost 50% last month, according to Coindesk data.
