Monday, April 26, 2010

JPMorgan Weekly Asset Allocation View 04/26/10

  • Asset allocation –– Stay long risky assets, but switch further from credit (high-grade) to equities.
  • Economics –– Upside risks to growth in the US and Japan.
  • Fixed Income –– Greece formally asks for EU/IMF support, but it remains too early to buy Euro high-yielders. Stay short Treasuries against Bunds. Turn neutral on Russia.
  • Equities –– Strong earnings reinforce the case for staying long equities. We see upside risks to our year-end S&P500 target of 1300.
  • Credit –– Tactically underweight US HG as heavy positioning and high valuations are leaving it vulnerable to the increase in global risks.
  • FX –– We lower our USD/EUR forecast to 1.30 for June.
  • Commodities –– We stay medium-term bullish crude oil

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