The Komo trading department, which accurately predicted a new high for US stocks, continues to believe that it is difficult to say that US stocks have peaked now.
The trading department of J.P. Morgan Chase said that another blowout of profits from artificial intelligence giant Nvidia (NVDA) and steady economic growth mean that the S&P 500 index (SPX) may still have room for further growth.
The team, which includes Andrew Tyler, head of US market intelligence at J.P. Morgan Chase, wrote in a report to clients, “Since the topic of artificial intelligence is still ongoing and macro assumptions are intact, US stocks may continue to set new historical highs.”
He believes that the combination of factors such as US GDP growth reaching or above trend levels, positive corporate profit growth, and the Federal Reserve's suspension of interest rate hikes will form a bull market for US stocks.
On Thursday, the S&P 500 index rose slightly after Nvidia announced higher-than-expected sales forecasts, driving the company's stock price above the $1,000 mark. Driven by the strong financial performance of US companies and the expectation that the Federal Reserve will relax its policy before the end of this year, the index has accumulated a cumulative increase of more than 5% since May.
Chipmaker Nvidia is the main driving force behind the rise in US stocks and the key to the artificial intelligence theme. The company's stock price rose by about 10%. Earlier sales forecasts showed that AI investment spending was still strong. The company contributed about a quarter of the increase in the S&P 500 index this year.
Starting now, J.P. Morgan traders expect the S&P 500 to continue to rise, albeit at a slower pace, as investors look for smaller artificial intelligence stocks and the stock market rebound extends beyond big tech stocks.
Tyler suggests investors adopt barbed investment strategies, including investing in so-called “Big Seven” stocks and semiconductor companies, as well as value and cyclical stocks such as banks, credit cards, automobile manufacturers and suppliers, and homebuilders.
Although it is not unusual for analysts to hold different opinions within the same bank, differences within J.P. Morgan Chase have been widening since last year. Tyler correctly predicted that US stocks would reach new highs, and the collapse predicted by the bank's chief global market strategist, Kolanovic, has so far not become a reality.