Guide to the Markets – US Q1 2020

J.P. Morgan Asset Management

Research

71 Pages

J.P. Morgan Asset Management compiles a data-heavy snapshot of global markets, arguing that resilient growth and concentrated equity leadership are shaping the current cycle. The guide highlights a soft-landing narrative alongside rising valuation dispersion, with the top 10 S&P 500 stocks driving an outsized share of returns and stretching multiples relative to history.

Key Takeaways

Concentrated Market Leadership: The top 10 S&P 500 stocks account for 33.7% of index weight and 84% of returns, highlighting extreme concentration risk in equity performance.
Resilient Consumer Balance Sheet: U.S. household assets reached $171.3 trillion versus $20.3 trillion liabilities, while debt service ratios remain near 9.9%, below the 2007 peak of 13.3%.
Valuation Dispersion Elevated: The top 10 stocks trade at 30.2x forward earnings versus 18.9x for the rest of the index, signaling a historically wide valuation gap.
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