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Rate cut breakdown: What you need to know nowVideo

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Transcript Browser Title: Video transcript: Rate cut breakdown: What you need to know now

Description: We examine the Fed's historic move and what it could mean for your portfolio.

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Video Id: 6362493448112

Audio Description Video Id: 6362494035112

Length (seconds): 113

Transcript: <h2>On screen:</h2> <p>This video opens on a woman in a green dress, speaking from an office with a bookshelf.</p> <h2>Note:</h2> <p>A bold disclaimer appears in a text box:</p> <h2>On screen:</h2> <p>INVESTMENT AND INSURANCE PRODUCTS:</p> <ul> <li><p><strong>NOT A DEPOSIT</strong></p> </li> <li><p><strong>NOT FDIC INSURED</strong></p> </li> <li><p><strong>NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY</strong></p> </li> <li><p><strong>NO BANK GUARANTEE</strong></p> </li> <li><p><strong>MAY LOSE VALUE</strong></p> </li> </ul> <h2>Sitara Sundar:</h2> <p>Here are your Top Market Takeaways.</p> <h2>On screen:</h2> <p>A purple circle with a title expands:</p> <h2>On screen:</h2> <p>Top</p> <p><strong>MARKET</strong></p> <p><strong>TAKEAWAYS</strong></p> <p>SEPTEMBER 20, 2024</p> <h2>On screen:</h2> <p>A question appears over gray:</p> <h2>On screen:</h2> <p>What happened at the recent Fed meeting?</p> <h2>On screen:</h2> <p>Identifying text appears beside the speaker:</p> <h2>On screen:</h2> <p><strong>SITARA SUNDAR</strong></p> <p>EQUITY SPECIALIST,</p> <p>J.P. MORGAN WEALTH MANAGEMENT</p> <h2>Sitara Sundar:</h2> <p>Leaves aren't the only thing to fall this autumn. This week, the Fed cut its key policy rate by 50 basis points to a range of 4.75% to 5.0%.</p> <h2>On screen:</h2> <p>Text appears in split screen beside her, along with a downward-pointing arrow:</p> <h2>On screen:</h2> <p>Key policy rate</p> <p>down 50 bps</p> <p>to a range of 4.75% to 5.0%</p> <h2>Sitara Sundar:</h2> <p>We believe this move indicates that the Fed is moving into a new regime. In the Fed's eyes, recent slowing in the labor market is now a bigger risk than inflation. This cut in rates, and plans to lower rates further, are designed to ensure the economic cycle continues.</p> <h2>On screen:</h2> <p>Another question appears over gray:</p> <h2>On screen:</h2> <p>What do Fed cuts mean for equity markets?</p> <h2>Sitara Sundar:</h2> <p>It depends on the health of underlying economic activity. In this cycle, current economic activity remains resilient. The labor market is cooling, not collapsing, consumer spending is healthy, and a soft landing remains our base case. This has historically been constructive for equities. While past performance is no guarantee of future results, over the past 12 Fed-cutting cycles, the average return for U.S. large-cap stocks in soft landings was a positive 16%, almost 4 times the return of cash.</p> <h2>On screen:</h2> <p>A bar graph appears, titled: 'Stocks have posted strong returns in soft landings in prior Fed cutting cycles: Market moves from the Federal Reserve's first to its last cut.' The graph's vertical axis ranges from negative 10% to positive 20%, while its horizontal axis shows three data parameters: 'Soft landing Average, Recession Average, and Average.' Each parameter has two returns represented: the 'S&amp;P 500 Return' in teal, and the 'U.S. Cash Return' in navy. The 'Soft landing Average' S&amp;P 500 Return is just over 15%, while the 'Soft landing Average' U.S. Cash Return is just under 5%. The 'Recession Average' S&amp;P 500 Return is about negative 5%, while the 'Recession Average' U.S. Cash Return is about 10%. Finally, the 'Average' S&amp;P 500 Return is about 3%, while the 'Average' U.S. Cash Return is about 7%. A box appears around the 'Soft landing Average' returns, and text with an upward-pointing arrow reads: 'Up 16%, the average return for U.S. large cap stocks in soft landings.'</p> <h2>Note:</h2> <p>Small text reads:</p> <h2>On screen:</h2> <p>Source: Bloomberg Finance L.P., Haver Analytics, Ibbotson, from Tim Andres &amp; Ben Bakkum, J.P. Morgan. Cash is represented by 3-Month Treasury Bill Secondaries from Haver Analytics from 1954-1978, and ICE BofA U.S. 3-month Treasury Bill Index from 1978-2020. Data as of March 2024.'</p> <h2>Note:</h2> <p>A disclosure with the first sentence reads:</p> <h2>On screen:</h2> <p><strong>Past performance is no guarantee of future results</strong>. It is not possible to invest directly in an index.</p> <h2>On screen:</h2> <p>A question appears over gray:</p> <h2>On screen:</h2> <p>What does this mean for investors?</p> <h2>Sitara Sundar:</h2> <p>We believe equities can be a growth engine for a long-term portfolio, but, there's potential for near-term volatility as markets digest this sharp pivot in monetary policy. We recommend that investors remain balanced within their equity portfolios, focusing on high-quality stocks and global diversification.</p> <h2>On screen:</h2> <p>A bulleted list with three items appears over white:</p> <h2>On screen:</h2> <p>Key Takeaways</p> <ul> <li>The recent 50bps rate suggests that the Fed is moving into a new regime</li> <li>Equities could be a growth engine for a long-term portfolio, but there's potential for near-term volatility</li> <li>In our view, maintaining a balanced approach within equity portfolios with an emphasis on high-quality stocks and global diversification, could be beneficial for investors</li> </ul> <h2>Sitara Sundar:</h2> <p>For more information, please visit CHASE.COM/THEKNOW</p> <h2>On screen logo:</h2> <p>A logo appears over gray: J.P. Morgan WEALTH MANAGEMENT.</p> <h2>On screen:</h2> <p>To learn more, visit CHASE.COM/THEKNOW</p> <h2>On screen:</h2> <p>An oval around the URL turns from white to blue.</p> <h2>Note:</h2> <p>Legal disclaimers.</p> <h2>On screen:</h2> <p>All market and economic data are sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.</p> <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 treated 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> <p>Investing in securities involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.</p> <h2>Note:</h2> <p>A disclaimer reads:</p> <h2>On screen:</h2> <p><strong>Outlooks and past performance is not a guarantee of future results.</strong></p> <p><strong>Past performance is no guarantee of future results.</strong></p> <h2>Note:</h2> <p>The final disclaimers in regular font read:</p> <h2>On screen:</h2> <p>It is not possible to invest directly in an index.</p> <p>The price of equity securities may rise or fall due to the changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Equity securities are subject to &quot;stock market risk&quot; meaning that stock prices in general may decline over short or extended periods of time.</p> <p>Asset allocation/diversification does not guarantee a profit or protect against loss.</p> <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</strong> (JPMS), 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 Chase &amp; Co. Products not available in all states.</p> <p>Copyright {{copyrightCurrentYear}} JPMorgan Chase &amp; Co.</p>

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