JPMorgan suggests stock market Europe investment profit- The higher profits of companies maintain the attractiveness to invest in the stock market in the face of a scenario of more growth in Europe, according to JPMorgan AM.

After a fairly positive first half for the stock exchanges of the major powers, especially in the United States and Europe, entities and fund managers are beginning to decipher their strategies for the last stretch of 2021.

This is the case of JPMorgan Asset Management, which made a presentation to the media on Thursday about the prospects that can be expected in this year. Lucía Gutiérrez-Mellado, strategy director of JPMorgan AM for Spain and Portugal, explained that for the manager it was very important to see profit growth after the very strong fall last year. Something that has finally been produced.

JPMorgan suggests stock market Europe investment profit

“So that the valuations did not pass to excessive levels we had to see how this increase in profits materialized, as it has finally happened, so we remain quite optimistic with business results, since not all positive news are discounted,” he said.

In fact, the manager has decided to revise upwards the estimates at a global level for the coming quarters despite the fact that many analysts question the levels at which many companies are listed. Something that for Gutiérrez-Mellado has many nuances “ " On valuations we must analyze the metrics against fixed income and we think that we must continue investing in the stock market taking this factor into account”.

JPMorgan suggests stock market Europe investment profit

At the level of portfolio positioning from the manager they opt for cyclical sectors, although they do not discard the technological ones despite the fact that the rally may be at a time of greater maturity. Meanwhile, in terms of value investments and growth, they claim to be at a point of equilibrium between the two.

” Financial services, industry, energy, materials, discretionary consumption usually do well when the bonds take off, as is the case today, " Gutiérrez-Mellado has deepened on the bets on which they are focusing thinking about the second tranche of the current year.

In this sense, Gutiérrez-Mellado has stated that they continue to have a constructive opinion on economic growth in the United States, although they think that the highest peak has developed more in the second quarter. ” This is the peak of the trend, but there will continue to be more moderate sustained growth, " he said.

JPMorgan suggests stock market Europe investment profit

The engines of growth, along the lines, would be the private sector and families. "As for companies, investment in Capex is a good catalyst and, in addition, the reality is that leverage levels are entering more reasonable figures,” he said.

"In general, we are not concerned about the level of indebtedness of companies... The good news is that they will be able to continue investing,” said the expert, who pointed to the evolution of the pandemic and, above all, the rate of vaccination, as key factors for the good progress of the coming months.

About families the story is similar. “They are in a good position to be able to consume, given that savings rates are at very high levels globally,” he said before indicating that they are beginning to see how these families begin to work those savings.

For its part, in Europe the cycle is at another point when the vaccination campaign begins more slowly. That is precisely why, right now, it would have an even higher growth path compared to the American country. ” At the moment in which the rate of vaccination has skyrocketed, governments have been able to be more lax with the measures and there has been a strong growth, " Gutiérrez-Mellado described.

Thus, from JPMorgan AM they think that in Europe the peak of growth has not arrived and we hope that the next quarter the expectations will be better. ” At the end of the year we could be with higher growth data than before the pandemic, " he said.