LIVE MARKETS-JPM will buy risk in H2, under certain circumstances

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JPM WILL BUY RISK IN H2, UNDER CERTAIN CIRCUMSTANCES

JPMorgan equity strategists are still betting they will be buyers of risk sometime in the second half, but several factors have to come into alignment for that to happen, the first being the closing of the gap between soft and hard data.

Hard data has been resilient so far this year while soft data flow has been weak, they say.

"The optimistic spin by many is that as the policy stance is turning more constructive, this will lead to a bounce in soft dataflow, and in the meantime hard data could hold out anyway, partly helped by the front-loading of activity ahead of the tariffs," explain the strats.

The big question, though, is whether the damage has already been done.

Earlier this year, the strats argued that trade uncertainty would hit equities in the first half, with better stock performance in the second half after negotiations are ironed out.

But they will also need earnings projections to be reset, weak guidance to be out of the way, and for the tariffs seesaw to settle over the next few months to start snapping up risk again.

"The behaviour of US bond yields and of the USD, in addition to the Fed independence/credibility outlook, remain the wild cards," they add.

(Lucy Raitano)

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