This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with David Lebovtiz, global market strategist at JPMorgan Asset Management.
With the market coming off its worst week in three months, the inflation question is atop many investors’ minds. Lebovitz is willing to agree at least in part with the Fed that the current inflation scare is transitory - a supply/demand “mismatch” as the economy rapidly emerges from the pandemic - but he believes the wage pressures we’re seeing now may prove stickier than the central bank anticipates.
Bottom line: While the Fed’s forecasts are probably too dovish, the market’s are far too hawkish in an expectation of a rate hike in 2022. The Fed, says, Lebovitz remains laser-focused on jobs, and as long the unemployment rate remains elevated, expect them to stick with the “not even thinking about thinking about raising rates message” language for quite a while longer.
What that means for the markets is anyone’s guess, of course, but Lebovitz reminds that each year brings an average 14% correction at some point, so it wouldn’t be unreasonable to expect the current downturn to run into the double-digits. Still, with earnings growth expected to be about 50% this year and the Fed unlikely to all of a sudden turn hawkish, it’s hard not to see the markets regaining their footing later in 2021.
There’s plenty more, including what sectors are set to benefit most from the current environment, and why Lebovitz is quite a bit more constructive on Bitcoin than some of his JPMorgan colleagues.
Listen to or subscribe to Alpha Trader on these podcast platforms:

Apple Podcasts

Spotify

Google Play

Stitcher


Learn more about your ad choices. Visit megaphone.fm/adchoices