Equities Outlook
Strategists Butt Heads on Materials Stocks as Trade War Drags On
- JPMorgan upgrades materials sector on global recovery hopes
- Bank of America remains underweight, citing poor fundamentals
Photographer: Taylor Weidman/Bloomberg
This article is for subscribers only.
JPMorgan Chase & Co. is taking a more optimistic view on the materials sector for next year, expecting a resolution to geopolitical trade tensions and a global economic recovery in 2020. That bullish view stands in stark contrast to strategists at Bank of America Corp., who think that any economic rebound may not be enough to offset concerns about the sector’s fundamental outlook.
The materials group is mostly comprised of cyclical stocks, and it’s heavily reliant on global economic data. No surprise, then, that it’s been whipsawed by U.S.-China trade rhetoric, given the exposure to commodities and the Chinese economy.