JPMorgan analyst: Bullish on US stock market pullback for buying on dips, follow S&P 500 breaking below 5,500 points is key

The US stock market saw a significant sell-off this week, with related technology stocks falling to a two-year low. Market risk aversion is also gradually increasing, and many investors are worried that a series of fiscal and trade policies implemented by President Trump (Trump Donald) will have a huge impact on the global economy.

JPMorgan's global strategist, David Lebovitz, has also raised the probability of a US economic recession from 15% to 20%. Although market risk premiums have increased, Lebovitz remains optimistic about the current situation, believing that the economic fundamentals are still stable, and despite the possibility of further declines, he remains bullish.

Recommend buying technology and financial stocks when the S&P 500 falls below 5,500 points

According to Bloomberg, although market volatility has intensified, Lebovitz believes that the current decline is mainly affecting overvalued and speculative assets, and there are no signs of a credit market collapse yet, with economic data still supporting economic expansion. He suggested that if the S&P 500 index falls below 5,500 points, consider buying US technology and financial stocks on dips, as the long-term prospects for these industries remain optimistic.

According to JPMorgan, the S&P 500 index is expected to reach 6,400 points by the end of this year, still with a 14% upside potential from the current level.

Economic data remains resilient, with stable labor market and corporate financial reports.

Lebovitz further stated that despite the low market sentiment, the US economic data has not deteriorated, for example, the stable February employment report and the strong performance of corporate financial statements for the fourth quarter of 2023. He believes that the economy is still in a "stable operation" state and has not experienced a "cliff-like decline" situation.

However, the market continues to be uncertain about the trade and immigration policies of the Trump administration, leading to an increase in investor risk aversion, further intensifying market volatility.

Tech stocks plummet, US bond yields decline, Bitcoin falls below 80,000 US dollars

The U.S. stock market did not start well this week. On Monday (3/11), the Nasdaq Index recorded its largest single-day decline of 4% since 2022, and the S&P 500 Index also tumbled 2.7%. U.S. bond yields fell, Bitcoin dropped below 80K, and around 10 institutional players postponed corporate bond issuance due to market weakness.

The market's uncertainty has led Wall Street to rethink its investment strategy. Earlier this year, the market generally expected Trump administration's tax cuts and deregulation policies to benefit the stock market, but now with increasing uncertainties in trade and immigration policies, the investment sentiment is turning cautious.

JPMorgan Chase recommends diversifying investments and shifting to high-yield bonds and overseas markets

In the face of market uncertainty, Lebovitz has begun adjusting asset allocation, recommending investors to moderately reduce stock positions and shift to high-yield bonds. In addition, J.P. Morgan has also expanded its investment scope to include markets such as China and Japan, and has ended its underweight position in the European market.

However, there are still many bulls in the market, such as UBS Global Wealth Management, which has stated that although UBS has increased hedging operations, it has not sold stocks, and still sees the growth potential of the AI and technology industries.

Although the market may fluctuate in the short term, the U.S. economy is not expected to plummet off a cliff.

Despite the market facing volatility, JPMorgan still believes that the U.S. economy will not experience a cliff-like decline. Lebovitz emphasizes: 'We do see a slowdown in the pace of economic growth, but currently there are no signs of a collapse.'

In conclusion, investors should pay attention to whether the S&P 500 index falls below 5,500 points and seize the opportunity to enter the market when it declines. JPMorgan recommends focusing on U.S. technology and financial stocks, while also diversifying investments moderately into overseas markets to reduce market risks and seize potential rebound opportunities.

(CPI leads the market to rise, with Bitcoin at 83K, while ETH continues to fall)

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