February 22, 2023

Institutional Views: JP Morgan, Deutsche Bank, RBC

Feb 22, 2023

Individual investors are often bombarded with specific stock calls and targets.

However, we believe you can get a better medium to long term perspective by considering asset class, sector, thematic and macro economic views.

To help you, every week, we pour through the research produced by some of the larger institutions, and summarize their market thoughts.

Below are this week’s 3 updates:

JP Morgan
Europe to achieve soft landing despite continued ECB rate hiking. European HY valuations are fair, but comparatively cheap to US market when adjusted for the higher duration and lower average credit quality of the latter. Underweight equities, specifically US large caps given earnings downgrade to continue. 2023 China growth forecast at 5.8% (could surprise on upside).

Deutsche Bank
Shallow US recession and Fed rate to peak at 5%. 10-Yr Treasuries to rise further. No rate cuts this year despite the market expecting two. Shallow European recession and ECB rate hikes results in German government bond downgrade. EM & Asia ex Japan upgraded to outperform. 15% EM EPS growth in 23 compared to rest of the world flat growth. S&P500 Dec23 target of 4,100. Brent crude price to rise to $100 by year-end. Skeptical of near-term upside in precious metals.

US 3.4% unemployment rate reading lowest in 53 years. Two-thirds of companies are beating earnings expectations, which is lower than 75% normally expected. US recession timing delayed to mid-2023. Most 2023 growth forecasts below consensus, however, Europe will achieve a soft landing on back of mild winter, China reopening, and stabilization of goods prices. Chinese 2023 growth forecast at 5.3%, which is likely to stir commodity prices. Ukraine war threatens to intensify.

* Please note these are not the thoughts or analysis of illio but the respective institutions. We have summarized what we believe are key points. We assumes no responsibility or liability for any errors or omissions in the content of this site. The information contained herein is not intended to be a source of advice and the information contained in this website does not constitute investment advice.

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