JPMorgan team says Soft Landing is more likely than recession

A partly lit home on the outskirts of Frankfurt, Germany, on Thursday, Sept. 1, 2022. German Economy Minister Robert Habeck said the country can't rely on gas supplies from Russia, as Europe braces for energy shortages this winter. Photographer: Ben Kilb/Bloomberg

By Tassia Sipahutar, Bloomberg

A soft landing is becoming the more likely scenario for the global economy, which will continue to provide tailwinds for risky assets, according to strategists at JPMorgan Chase & Co.

Recent data pointing to moderating inflation and wage pressures, rebounding growth and stabilizing consumer confidence suggest the world will avoid a recession, a team including Marko Kolanovic and Nikolaos Panigirtzoglou wrote on Monday.

Markets can benefit from fiscal stimulus in China, energy support plans in Europe and very low investor sentiment, they said.

“Economic data and investor positioning are more important factors for risky asset performance than central bank rhetoric,” the strategists wrote. “We maintain a pro-risk stance.”

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