At an event organized by JP Morgan Asset Management, Lucía Gutiérrez-Mellado, the firm’s director of strategy, announced a slowdown in economic growth. However, she stressed that recession has been avoided, and the strength of this slowdown will depend largely on developments in the labor market.

Gutiérrez-Mellado noted signs of weakening in the U.S. labor market, noting that this year has been a surprise, with unexpectedly robust growth in the first half, driven by savings and tax aid that now has limited room to continue supporting the economy. According to her, the future of the American economy will be linked to the labor market.

As for Europe, the director of JP Morgan AM predicted a less pronounced slowdown, in part due to the surprising resilience of the United States.

Gutiérrez-Mellado also highlighted the leadership of raw materials in the last quarter, especially the price of oil, which is influenced by events in the Middle East.

As far as China is concerned, she anticipated that macroeconomic data will reach a nadir before the end of the year and some recovery in economic growth is expected as the Chinese government implements monetary policy measures.

Consequently, Gutiérrez-Mellado emphasized that she will maintain a neutral position in the manager’s portfolios, given the perspective of a low growth environment and a restrictive monetary policy. Furthermore, they will remain neutral in fixed income compared to equities.

Regarding inflation, Gutiérrez-Mellado expressed that, despite some increases in interest rates, they believe that the end of interest rate increases by central banks is near, with the possibility of an additional rise in the United States at best and the conclusion in Europe.

To conclude, she highlighted that the economic scenario is more positive compared to a few months ago, with moderate economic growth and a restrictive monetary policy. Additionally, she announced that the JP Morgan AM markets guide, which used to be updated quarterly, will now be updated daily in Europe, following the same practice as in the United States.

K. Tovar

Source: Descifrado

(Referential image source: Mathieu Stern, Unsplash)

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