JP Morgan sees market correction through September

[portobellovcs3]

S&P 500 may see correction to 830-875 levels: JP Morgan Fri Jun 26, 2009 4:53am EDT












(Reuters) - The Standard & Poor's 500 index .SPX is likely to see a correction to between 830 and 875 through September, given its virtually uninterrupted rise since its March lows, J.P. Morgan Securities said, and urged investors to use the correction to build positions in cyclical stocks.
JP Morgan strategists upgraded U.S. industrials and materials sectors to "overweight" from "neutral" in anticipation of continued outperformance of cyclical stocks. The S&P 500 index has risen 32 percent since its March lows and much of this move has been powered by cyclicals -- discretionary, technology, industrials and materials -- and financials, JP Morgan strategists said.
They see a global synchronized economic recovery, with the recent rise in equity markets eventually leading to a four-to-six quarters of above-trend growth sometime in 2010.
But in the near term, a larger correction is still likely, though this could be followed by a strong rally to between 950 and 1000 by the end of 2009, strategists wrote in a note dated June 25. The S&P 500 index gained 19.32 points, or 2.14 percent, to close at 920.26 Thursday.

[Slimprofits]

Re: JP Morgan sees market correction through September

Sounds like crystal ball bullshit to me, especially that last part about a strong rally in the 2nd half of 2009.

All I know is, with all of that talk from the President and BerBanker all the way on down to the talking heads on television urging viewers to jump up into the investing pool, the S & P still never passed the intra-day high that it touched in early January. So much for the green shoots.

[ax]

Re: JP Morgan sees market correction through September

Sounds like crystal ball bullshit to me, especially that last part about a strong rally in the 2nd half of 2009.

All I know is, with all of that talk from the President and BerBanker all the way on down to the talking heads on television urging viewers to jump up into the investing pool, the S & P still never passed the intra-day high that it touched in early January. So much for the green shoots.

]]

Sounds like they had a happy hour with GS and decided they could start front-running some shorts again. Ridiculous. The last 30 minutes of trading during the week were nuts.

[portobellovcs3]

Re: JP Morgan sees market correction through September

I guess they are planning on letting the markets pull back for a while. They have been propping it up but if they let it fall, gravity will take over. So I found it interesting that they are advising that things could drop in the shorter term.

[Slimprofits]

Re: JP Morgan sees market correction through September

Oh I see, you're hinting at the angle of institutional buying driving the market...

Thank you for pointing that out. I should apologize, my first reaction was to take the straight view, i.e. looking at it as investment advice. Of course, you've got to look at all of the potential angles.

[portobellovcs3]

Re: JP Morgan sees market correction through September

And just a few weeks ago Blankfein of Goldman Sachs said something to the effect that this is not an economic recovery. He also seemed to be hinting that things had gone up too fast in the markets. Also, one of the bigwigs at Morgan Stanley (90% sure it was them) said he would breathe a sigh of relief if and when the equity markets declined 15%. Seems to me that the big boys are going to let it fall at least a decent amount. And yes, I do believe that they are controlling the markets these days and have been doing a pretty darn good job at it.

[rj1]

Re: JP Morgan sees market correction through September

I heard from a VP in my company that it will level out in 2010 but won't actually start to improve until 2011. So that's my company's personal opinion.