zhoufang2022-08-28 18:15:24

After a disappointing start to 2022, stocks have shown resilience in the second half.

Since the end of June, the S&P 500 has surged nearly 10%. And according to JPMorgan, there’s still more upside ahead.

The Wall Street gorilla recently reiterated its year-end price target of 4,800 for the S&P 500. With the benchmark index currently sitting at roughly 4,100, JPMorgan’s target implies a potential upside of 16%.

The firm notes how lower market volatility can lead to inflows from systematic investors.

“Alongside corporate buybacks, these strategies can provide steady inflows of several billion per day in equities for the next 2-3 months,” writes Marko Kolanovic, chief global markets strategist at JPMorgan, in a note to investors. “Trend following strategies that were largely short equities this year are covering shorts.”

Let’s take a closer look at this call — and where the market guru sees opportunities.

Don’t miss

The $100 billion catalyst

Technical indicators could play a critical role in the potential turnaround.

Kolanovic points out that the S&P 500 “is on the cusp of breaking important momentum signals” such as the 200-day moving average.

On stock charts, the 200-day moving average is shown as a line. Traders can use this line to determine whether the trend is up or down and identify potential support or resistance areas.

The S&P 500 has largely traded below its 200-day moving average in recent months. Kolanovic suggests that if the index can break above this 200-day moving average, it could lead to inflows “on the order of ~$100 billion.”