- Investors should consider U.S. value stocks and stocks with low price-to-earnings ratios.
- JPMorgan’s blockchain lead says most cryptos are junk.
JPMorgan Chief Global Strategist David Kelly offered his thoughts to crypto investors worried about the Fed’s latest hawkish stance. He advised the investors to buy long-term value and forget about short-term gains. On Friday, equity markets lagged following Fed Chairman Jerome Powell’s announcement that the top bank would curb inflation regardless of economic risks.
The statement dashed hopes of a short-term dovish pole, fueling predictions that this year’s bear market is far from over. A portion of Powell’s speech at Jackson Hole is read;
The economy has one foot on the banana peel and the other is at a low level. So the best place to take now is to consider reviews.
He suggests investors weigh U.S. and global prices and stocks with relatively low P/E ratios (earnings-to-earnings ratios). Markets have been down since the start of the year on fears of tighter monetary policies to curb inflation. Inflation, the highest in four decades, is slowly pushing the economy into recession.
Bulls were relieved that inflation and the Fed’s pace of interest rate hikes eased. The performance of growth and value stocks was a reflection of those fears and expectations. In comparison, value stocks outperformed growth stocks in the first half of 2022.
However, Powell’s speech on Friday helped value stocks regain their pole position. Kelly advised investors to sell crypto and avoid big tech stocks and Bitcoin. On Monday, Bitcoin traded at sub-$20,000 levels, the price of MEME (a meme stock ETF) has fallen by nearly 20 percent in the past two weeks, trading around the lows of last month.
Kelly predicts more volatility and a bigger fallout. However, he expects the economy to feel healthy by the end of next year. But the question is, did the Fed do much damage to the economy before that? The global strategist added that the Fed’s efforts to reduce inflation will seriously harm the economy. He went on to say that the central bank is overestimating the strength of the US economy.
Most cryptos are garbage – Omar Farooq
Umar Farooq, CEO of Onyx Digital Assets (JPMorgan’s blockchain division), believes that there have not yet been complete explanations for the use cases of blockchain technology, but including cryptos. Speaking at a seminar organized by Singapore’s monetary regulator, the Monetary Authority of Singapore, Farooq said only a few dozen symbols make sense; Most of them are garbage.
Therefore, he predicted that many of them would soon disappear. He said the rule isn’t caught until the use cases are fully developed. However, he predicts that the big institutions pursuing the technology will have a big win when the appropriate regulation is enacted.
Farooq went on to say that the current position of Web 3 is still fueled by speculation and has yet to be resolved. But he admitted that these conditions are necessary for the industry to mature. It should be noted that JPMorgan has not released any blockchain-related products. Instead, it is deploying its blockchain infrastructure.