JPMorgan Drops Cautious Stance, Urging Buy the Dip in Stocks
- Strategists expect fiscal, monetary policies will work
- Investors advised to add to overweight equity position
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Investors should buy the dip in equities because government and central bank policies will counter the economic blow of the spreading coronavirus, according to JPMorgan Chase & Co. strategists who had previously been telling clients to trim risky bets.
The outbreak and its economic implications are “the main source of risk, but the market has significantly repriced this risk over the past couple of weeks,” strategists including Marko Kolanovic and Nikolaos Panigirtzoglou wrote in a note to clients. “We expect the impact of COVID-19 to be temporary and mitigated by broad policy stimulus, even as the virus spread is proving more severe than anticipated.”