JP Morgan – Mid-year Outlook, 2023

JP Morgan's Mid-year Outlook for 2023 acknowledges the threats to the economy, such as banking troubles, tighter credit, reduced consumer savings, falling corporate profits, and increasing layoffs in the United States. In Europe, there is a concern about persistent inflation and border conflicts. However, China's recovery appears to be sustainable despite ongoing geopolitical risks. According to Bloomberg economists and the Federal Reserve staff, a US recession by the end of the year seems likely. Despite these challenges, the long-term return outlook seems to have improved. After a historically poor performance in 2022 for both stocks and bonds, the markets appear to agree. A globally diversified portfolio consisting of 60% stocks and 40% bonds has seen a 6% year-to-date increase. JP Morgan believes that diversified portfolios can continue to generate higher returns compared to cash or inflation until 2024. In their Mid-Year Outlook, JP Morgan utilizes client data to understand the wider market environment and individual investment choices. The findings from this analysis have both surprised and reassured them, providing valuable insights that can benefit readers as well. To help readers navigate the anticipated recession, JP Morgan shares five key ideas born out of their best thinking in the following pages.