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A 2023 look-back: What we got right—and wrongVideo

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Video ADA Text: A 2023 look-back: What we got right—and wrong video

Transcript Browser Title: Video transcript: A 2023 look-back: What we got right—and wrong video

Description: We were too pessimistic on economic growth, but hit the mark when we spotted potential for stronger markets.

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Video Id: 6341980665112

Audio Description Video Id: 6341980666112

Length (seconds): 133

Transcript: <h2>Side note:</h2> <p>Background music plays.</p> <h2>On screen:</h2> <p>This video opens with a woman in a black sweater, speaking from behind a wooden desk with a plant.</p> <h2>Side note:</h2> <p>A bold disclaimer appears in a text box reads:</p> <h2>Text on screen:</h2> <p><strong>INVESTMENT AND INSURANCE PRODUCTS:</strong></p> <ul> <li><strong>NOT A DEPOSIT</strong></li> <li><strong>NOT FDIC INSURED</strong></li> <li><strong>NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY</strong></li> <li><strong>NO BANK GUARANTEE</strong></li> <li><strong>MAY LOSE VALUE</strong></li> </ul> <h2>Abigail Yoder:</h2> <p>Here are your top market takeaways.</p> <h2>On screen:</h2> <p>A circle with a title expands: 'Top Market Takeaways.'</p> <h2>Text on screen:</h2> <p>Text appears over the speaker: 'Abigail Yoder, Executive Director, Equity Strategy, J.P. Morgan Wealth Management. December 1, 2023.'</p> <h2>Abigail Yoder:</h2> <p>What's happened is we're wrapping up the 3Q earning season with over 95% of companies now having reported. Results have come in better than expected and earnings growth year over year has turned positive for the first time since 3Q 2022.</p> <h2>On screen:</h2> <p>An outline of a stoplight appears beside her, turning from red to green.</p> <h2>Text on screen:</h2> <p>Then, a question appears over gray: 'How have markets reacted?'</p> <h2>Abigail Yoder:</h2> <p>Despite companies beating by 7% on average, they haven’t been raising guidance as they had during 1Q and 2Q of this year. Management teams are pointing to more uncertainty in their outlook given the volatile macroeconomic backdrop. As a result, the S&amp;P 500 didn’t see the typical positive price reaction it normally does during earning season.</p> <h2>Text on screen:</h2> <p>Another question appears over gray: 'What is driving our outlook?'</p> <h2>Abigail Yoder:</h2> <p>We are still positive on equity markets from here, and in particular on the earnings outlook.</p> <h2>On screen:</h2> <p>A circle graph appears beside Abigail, illustrating 29% with icons of a computer and other tech.</p> <h2>Abigail Yoder:</h2> <p>The tech sector, which is 29% of the S&amp;P 500, is also exiting their rolling earnings recession. And we expect growth rates to accelerate for that sector, driven by secular demand in the form of AI and cloud and cyclical demand in the form of PC and smartphones rebounding.</p> <h2>Text on screen:</h2> <p>A question appears over gray: 'What could derail our view?'</p> <h2>Abigail Yoder:</h2> <p>Our more positive outlook for equities is predicated on our base case for a soft landing.</p> <h2>On screen:</h2> <p>Bullet points illustrate the Base Case:</p> <ul> <li>No 2024 recession</li> <li>No more rate hikes</li> <li>2-3% inflation</li> </ul> <h2>Abigail Yoder:</h2> <p>I.e. we don't foresee a recession next year. The Fed is done hiking and inflation comes down to 2-3 percent. We do expect growth to slow from here, but if it were to slow in excess of our expectations, that could lead to slower revenue and earnings growth, which is the main driver of our positive outlook.</p> <h2>Text on screen:</h2> <p>Another question appears: 'What can we expect from the equities market?'</p> <h2>Abigail Yoder:</h2> <p>We continue to expect equities to remain volatile over the next few months, and our price target for the S&amp;P 500 by mid-year is 4,700.</p> <h2>On screen:</h2> <p>A line graph titled 'We are expecting markets to hit 4,700 by mid-year'  illustrates the price target with the subheading: 'Earnings likely to drive stock prices over the coming year. Updated mid-2024 U.S. equity scenarios (utilizing PB earnings estimates).' The vertical axis represents the S&amp;P 500 price range from 3,500 to 5,300. The horizontal axis ranges from December '22 to September '23. The rising and falling graph line is labeled 'Number 2, Base Case: $4,650-$4,750, NTM P/E: 18.6x. EPS: $250 2H24/1H25.' Two dotted lines above and below the Base Case are labeled 'Number 1, Bull Case,' and, 'Number 3, Bear Case,' respectively. The Bull Case is $5,150-$5,250 with NTM P/E: 20.0x and EPS $260 2H24/1H25; while the Bear Case is $3,700-$3,850 with NTM P/E: 17-17.5x and EPS $220 2H24/1H25.</p> <h2>Side note:</h2> <p>Small print text appears.</p> <h2>Text on screen:</h2> <p>Source: Bloomberg Finance L.P. J.P Morgan Private Bank Data as of November 14, 2023.'</p> <h2>Abigail Yoder:</h2> <p>We like the broad U.S. market for growth exposure and mid-cap equities for more cyclically oriented exposure, which trades at a steep discount to the broad market.</p> <h2>On screen:</h2> <p>A bulleted list appears below a title with a magnifying glass:</p> <h2>Text on screen:</h2> <p>'KEY TAKEAWAYS</p> <ul> <li>First: 'We reaffirm our view that the market is exiting the period of rolling earnings recessions across sectors'</li> <li>And second, 'We remain positive on the U.S. equity market, and look to add exposure on mild pullbacks as well as strategically'</li> </ul> <h2>Abigail Yoder:</h2> <p>To learn more, please visit chase.com/theknow.</p> <h2>On screen:<br /> </h2> <p>A logo appears over grey:</p> <h2>On screen logo:</h2> <p>J.P. Morgan Wealth Management.</p> <h2>Side note:</h2> <p>Legal disclosures:</p> <h2>Text on screen:</h2> <p>The views, opinions, estimates and strategies expressed herein constitutes the speaker's judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan. This information in no way constitutes J.P. Morgan Research and should not be trusted as such. You should carefully consider your needs and objectives before making any decisions --including whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with any investment or financial service, product or strategy prior to making an investment decision. For additional guidance on how this information should be applied to your situation, you should consult your advisor.</p> <h2>Side note:</h2> <p>A disclosure in bold reads:</p> <h2>Text on screen:</h2> <p><strong>Investing in securities involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. Outlooks and past performance is not a guarantee of future results.</strong></p> <h2>Side note:</h2> <p>A disclosure in regular reads:</p> <h2>Text on screen:</h2> <p>Investment in alternative investment strategies is speculative, often involves a greater degree of risk than traditional investments including limited liquidity and limited transparency, among other factors and should only be considered by sophisticated investors with the financial capability to accept the loss of all or part of the assets devoted to such strategies.</p> <h2>Side note:</h2> <p>A disclosure in bold reads:</p> <h2>Text on screen:</h2> <p><strong>Asset allocation/diversification does not guarantee a profit or protect against loss.</strong></p> <h2>Side note:</h2> <p>A disclosure in regular reads:</p> <h2>Text on screen:</h2> <p>J.P. Morgan Wealth Management is a business of JPMorgan Chase &amp; Co., which offers investment products and services through <strong>J.P. Morgan Securities LLC (JPMS)</strong>, a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan.</p> <p>Copyright {{copyrightCurrentYear}} JPMorgan Chase &amp; Co.</p>

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