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Global economy may avoid recession as inflation risks ease – J.P. Morgan

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Global economy may avoid recession as inflation risks ease – J.P. Morgan By Reuters

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Economy 8 minutes ago (Sep 13, 2022 13:20)

© Reuters. FILE PHOTO: Citibank and J P Morgan buildings are seen in the financial district of Canary Wharf in London, Britain January 19, 2017. REUTERS/Kevin Coombs

(Reuters) – The global economy could avert a recession as data points to a potential soft landing, J.P. Morgan analysts said, while adding that the Federal Reserve might have “over-reacted” with the 75 basis point rate hike in July.

A clutch of recent data from major economies is suggesting moderating inflation and wage pressures as well as stabilizing consumer confidence, the brokerage said in a note dated Monday.

“The probability for soft landing has ticked up with moderating inflation and jobs prints, while at the same time, positioning remains at extreme lows,” the brokerage added.

Among stocks, the energy sector is trading at a heavy discount and offers a favorable investment opportunity, the analysts said.

The brokerage is also bullish on China as COVID-19 restrictions in the country ease and fiscal stimulus expands, boosting bets on risk assets.

Surveys from last week showed Europe is almost certainly entering a recession, with inflation running at more than four times the European Central Bank’s 2% target. Deepening cost of living crisis and a gloomy outlook is also keeping consumers wary of spending.

But J.P. Morgan said it was expecting European governments to act to shield consumers from biting energy inflation, as natural gas prices skyrocket after sanctions-hit Russia disrupted supply.

Corporate earnings in Europe are also “defying economic momentum”, J.P. Morgan said.

The U.S. Labor Department’s data last month showed consumer prices did not rise in July due to a sharp drop in the cost of gasoline, delivering a sign of relief for Americans who have watched inflation reach levels not seen in four decades.

Global economy may avoid recession as inflation risks ease – J.P. Morgan

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By Christian Kraemer, Miranda Murray and Kate Abnett BERLIN/BRUSSELS (Reuters) – Germany said on Tuesday it aimed to expand lending to energy firms at risk of being crushed by…

Dollar weakens ahead of key U.S. inflation dataBy Reuters – Sep 13, 2022

By Samuel Indyk LONDON (Reuters) – The dollar eased further on Tuesday ahead of U.S. inflation data that could show some signs of softening, while the euro found its footing above…

Britain still planning fiscal event this month – PM’s spokesmanBy Reuters – Sep 13, 2022

LONDON (Reuters) – British finance minister Kwasi Kwarteng still aims to make a fiscal statement before the end of the month but a date will not be set until after the funeral of…

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Latest News

Global economy may avoid recession as inflation risks ease – J.P. Morgan

0

Global economy may avoid recession as inflation risks ease – J.P. Morgan By Reuters

Breaking News

‘;

Economy 8 minutes ago (Sep 13, 2022 13:20)

© Reuters. FILE PHOTO: Citibank and J P Morgan buildings are seen in the financial district of Canary Wharf in London, Britain January 19, 2017. REUTERS/Kevin Coombs

(Reuters) – The global economy could avert a recession as data points to a potential soft landing, J.P. Morgan analysts said, while adding that the Federal Reserve might have “over-reacted” with the 75 basis point rate hike in July.

A clutch of recent data from major economies is suggesting moderating inflation and wage pressures as well as stabilizing consumer confidence, the brokerage said in a note dated Monday.

“The probability for soft landing has ticked up with moderating inflation and jobs prints, while at the same time, positioning remains at extreme lows,” the brokerage added.

Among stocks, the energy sector is trading at a heavy discount and offers a favorable investment opportunity, the analysts said.

The brokerage is also bullish on China as COVID-19 restrictions in the country ease and fiscal stimulus expands, boosting bets on risk assets.

Surveys from last week showed Europe is almost certainly entering a recession, with inflation running at more than four times the European Central Bank’s 2% target. Deepening cost of living crisis and a gloomy outlook is also keeping consumers wary of spending.

But J.P. Morgan said it was expecting European governments to act to shield consumers from biting energy inflation, as natural gas prices skyrocket after sanctions-hit Russia disrupted supply.

Corporate earnings in Europe are also “defying economic momentum”, J.P. Morgan said.

The U.S. Labor Department’s data last month showed consumer prices did not rise in July due to a sharp drop in the cost of gasoline, delivering a sign of relief for Americans who have watched inflation reach levels not seen in four decades.

Global economy may avoid recession as inflation risks ease – J.P. Morgan

Germany, EU race to shore up struggling energy firmsBy Reuters – Sep 13, 2022

By Christian Kraemer, Miranda Murray and Kate Abnett BERLIN/BRUSSELS (Reuters) – Germany said on Tuesday it aimed to expand lending to energy firms at risk of being crushed by…

Dollar weakens ahead of key U.S. inflation dataBy Reuters – Sep 13, 2022

By Samuel Indyk LONDON (Reuters) – The dollar eased further on Tuesday ahead of U.S. inflation data that could show some signs of softening, while the euro found its footing above…

Britain still planning fiscal event this month – PM’s spokesmanBy Reuters – Sep 13, 2022

LONDON (Reuters) – British finance minister Kwasi Kwarteng still aims to make a fiscal statement before the end of the month but a date will not be set until after the funeral of…

Our Apps



Terms And Conditions
Privacy Policy
Risk Warning

© 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

U.S. CPI, Rail and Nursing Strikes, Peloton Turmoil – What’s Moving Markets

Previous article

BLS: CPI increased 0.1% in August; Core CPI increased 0.6%

Next article

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Comments

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