2023-05-05 14:04:18
JPMorgan predicted the withdrawal of investors in gold and the tech sector due to the recession
According to experts, the strategy of buying gold and growth stocks, combined with short positions on the dollar, will work well in both a mild recession and a deep economic downturn.
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JPMorgan believes that investors will increasingly prefer gold and technology stocks. Investing in these assets is expected to provide protection once morest a possible US recession this year. transmits Bloomberg.
The US banking crisis has boosted demand for gold, analysts say, as it is seen as both a bet on monetary easing and a hedge once morest a “catastrophic scenario.”
JPMorgan also drew attention to the interest in gold from institutional investors. Thus, in the first three months of 2023, world central banks purchased 228 tons of gold. This is the highest figure for the first quarter since at least 2000, notes CNBC.
BofA says investors are preparing for a ‘2009-style recession’
As for the shares of the IT sector, their share in portfolios has grown significantly this year, approaching the maximum of 2021. In addition, tech stocks have the lowest share of short positions among all sectors, which means that the market as a whole is optimistic regarding the prospects for the industry.
JPMorgan noted that the strategy of buying gold and growth stocks, combined with shorting once morest the US dollar, seems to have gained wide popularity in the market in recent months. The bank explained that in this case, the portfolio has limited downside potential in the event of a mild recession in the US and, on the contrary, a large upside potential in a deep economic downturn.
Short (short position) is the sale of securities, currencies or goods that the trader does not own and borrows from a broker. A trader opens a short position, hoping to buy back an asset (for example, shares) following a fall in prices and thereby capitalize on a decrease in value. In this case, he is said to be short or short.
Earlier, Bank of America said that gold is a good asset even with persistently high inflation.
Now gold is trading near its all-time high, recorded in August 2020 at $2,075 per ounce. Demand for the precious metal is supported by fears of a recession and an aggravation of the crisis in the US banking sector, as well as expectations of the Fed’s transition to a rate cut.
Marina Anufrieva.
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