JPMorgan Private Bank is bullish on four US equity sectors amid the ongoing capital spending trend.
Abigail Yoder, equity strategist at the financial giant, says… New analysis The bank is positive regarding the financial, industrial, IT, utilities and energy infrastructure sectors.
Yoder points out that financial statements are well positioned to absorb market fluctuations.
“Large, high-quality banks remain well positioned in the current rate environment, which we describe as ‘higher for longer but stable’. Net interest margins continue to benefit from high rates and a steep yield curve. Resilient credit fundamentals and strong capital positions support earnings durability and downside resilience.”
Regarding industries, Yoder says defense spending, infrastructure construction, AI-related capital expenditures, and reshoring initiatives are all driving structural demand.
“Money is moving toward a range of capital-intensive industries, from energy and construction equipment to various types of advanced manufacturing. Together they illustrate the breadth and depth of the industrial cycle.”
The strategist points out that information technology was the primary driver of the S&P 500’s profits.
“The recent valuations pressure reflects macro volatility rather than a deterioration in fundamentals. As we discussed, we see a bright outlook for technology earnings, underscoring the sector’s role as a key pillar of growth and innovation in the US economy.”
Finally, Yoder says utilities and energy infrastructure are increasingly exposed to structural demand.
“Electrification, AI-driven energy consumption and grid modernization highlight the economy’s need for long-term energy investment and the sector’s strong earnings prospects.
Forecasters expect electricity demand to exceed current generation capacity in the coming years… The continuing imbalance between supply and demand will support the pricing power of companies. We believe it will also support a multi-year investment cycle across electricity generation, transmission and grid infrastructure.
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