Stocks are a common theme among Wall Street giant traders, which include betting on Japanese banks, German companies and emerging markets, according to a report by strategists such as Nikolaos Panigirtzoglou, Marko Kolanovic and John Normand, released this week.
The bank maintains the underweight recommendation for bonds, mainly investment-grade corporate debt, and advises to reduce gold bets.
"If cyclical or political risks recede in 2020, it would be difficult for asset allocators not to accept more weight in equities," analysts wrote, noting that bonds yield "significantly" less than equities today.
After global industrial purchasing manager indices have reached lows, and at a time when the US labor market remains strong, the risks of recession in the United States are decreasing, reinforcing the The idea that the three interest rate cuts made by the US Federal Reserve in 2019 are simply a mid-cycle adjustment.
According to the bank, they increased their government bond allocation from -6% to -3% from the benchmark and cut corporate debt allocation from -5% to -8%.
By December of last year, strategists had recommended a positive stance on stocks versus bonds, based on the idea that corporate results would continue to exceed expectations.
Although bonds appreciated this year, the return was well below the MSCI ACWI stock index.
JPMorgan has flagged the US presidential election as the biggest risk in 2020, especially if a progressive candidate like Elizabeth Warren wins the Democratic Party nomination.