JPMorgan strategists, led by Mislav Matejka, argue the rally still has legs despite higher global bond yields and lingering inflation nerves. They point to better profit revisions and a supportive backdrop that can actually make valuations look more attractive when prices wobble.
Even with yields hitting very elevated levels, equities have remained resilient. The S&P 500 is up around 13%, and the MSCI All-Country World Index is higher by about 14%. In Europe, the Stoxx 600 has gained 9.6% this year, trailing the US benchmark but still pacing for a fourth consecutive annual increase. Meanwhile, manufacturing indicators across the US and the euro area sit near four-year highs, adding some real-economy support to the rally narrative.
The team thinks even a moderate step-up in central bank tightening is unlikely to knock the equity backdrop off course unless inflation expectations shift in a big way. They also flag a possible changing of the guard in global leadership by year end, writing that "We stay with the view that non-US equities have a good chance to outperform the US for the second year in a row."
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Matejka called in June for stocks to push to new highs in the second half. Since then, the MSCI ACWI has risen 2.4% and is hovering near a record. For your wallet, the through-line is simple enough: earnings momentum and healthier global activity are the pillars behind this view, so short-term shakiness is being framed as opportunity rather than a reason to head for the exits.
