JP Morgan considered the fall of the indices to be a good opportunity for purchases.
On Monday, indices fell at the lows of the day by an average of 3%.
The bank believes that the negative with the overreaction of traders to risks. For example, on Monday, September 20, the market fell by technical factors and represented an excellent opportunity to buy the fallen shares. Marko Kolanovic, JPMorgan’s chief strategist for global markets, wrote about this in a review.
The expert said that technical factors such as options hedging, low liquidity, and traders’ overreaction to perceived risks were the reason for the sell-off in the market.
However, Kolanovich stressed that JPMorgan remains optimistic about the stock market. For example, JPMorgan recently raised its year-end forecast for the S&P 500 from 4,600 to 4,700 and believes the index could surpass 5,000 in 2022.
“Our fundamental thesis remains unchanged, and we view the sell-off as an opportunity to buy back the fall,” JPMorgan quoted CNBC in a review.
During the day, almost the entire market was falling: out of 11 sectors included in the S&P 500 index, only five companies closed more than 1% in positive territory, four of which are airlines – in particular, Delta Air Lines (+1.67), American Airlines (+ 3.04%), Southwest Airlines (+ 1.02%). Some companies from the healthcare sector also grew – Eli Lilly (+ 0.67%), Pfizer (+ 0.71%), Merck (+ 0.35%).
Market participants are worried that the Chinese government will continue to put pressure on various sectors of the economy and allow the most extensive Chinese developer Evergrande to go bankrupt, which will hurt shareholders and bondholders of the company, writes The Wall Street Journal. “This is a threat to global growth,” the managing director of brokerage WallachBeth Capital quoted WSJ as saying. – What if the situation gets worse? It means a blow to China’s financial system and, given the importance of China, to overall economic activity around the world.
“Investors also fear a pullback in the stock market after this year’s record growth and note a slowdown in the development of the US economy amid a new wave of coronavirus infection. Against this background, the broad market index S&P 500 ended the trading session on Monday in the red by 1.7%.
At the same time, it decreased by 2.9%, to 4305.91 points at the low of the day. The Dow Jones Industrial Average fell 1.78%, or 2.8%, at the low of the day, to 33614.43 points. Technological NASDAQ lost 2.19% by the end of trading, with a maximum intraday fall of 3.4% to 14,530.1 points.
