JPMorgan is predicting a broad-based market surge that could carry major indices back to all-time highs in just a few days.
In a new note, JPMorgan says the stock market is likely to mirror the broad rallies witnessed earlier this month, with investors rushing in to buy names trading at a discount, CNBC reports.
“We think markets will begin with an ‘Everything Rally’ similar to that seen on Mar 31 or Apr 8, with investors chasing sectors and sub-sectors hit the most. Look for a return to all-time highs across the major indices, which could happen over the next 2-3 trading sessions.”
While the bank is predicting new record highs, JPMorgan believes tech needs to regain its place as the market leader to sustain bullish momentum.
“After that, we think a return to fundamentals is warranted. If so, the next stage of the rally depends on Mag7 and MegaCap Tech retaking leadership.”
Fundstrat head of research Tom Lee agrees with JPMorgan, saying that tech stocks are fundamentally strong names that are underowned right now after investors dumped them due to valuation and AI-disruption fears.
“These companies have true moats. They’ve grown earnings consistently faster than the S&P. I think they’re going to be one of the winners around AI… To buy them at a market multiple means that five years from now, I think people are going to be surprised that they could buy them so cheaply.”
Lee also predicts that the S&P 500 will soar to as high as 7,300 before igniting a “larger drawdown.”
The S&P 500 is trading at an all-time high of 7,041 as of Thursday’s close.
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