Proactive Investors
18 May 2026, 14:17 UTC · 3d ago
Cyclical stocks' strong run may be due a pause despite leading markets this year, leading bank warns
Source · https://www.proactiveinvestors.co.uk/companies/news/1092460
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Proactive Investors
18 May 2026, 14:17 UTC · 3d ago
Source · https://www.proactiveinvestors.co.uk/companies/news/1092460
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Story key points
4 claims · impact-rated
JP Morgan warns of a growing divergence between the rally in cyclical stocks and softening economic data, specifically Purchasing Managers' Indices (PMIs). — A disconnect between price action and economic fundamentals often precedes a tactical correction or a shift toward defensive assets.
-0.60Market breadth has narrowed sharply in the US and Europe, with fewer stocks contributing to the overall rally over the last three months. — Narrowing breadth is typically a bearish signal indicating a fragile rally driven by a small number of names rather than broad participation.
-0.50JP Morgan has shifted its US preference away from small-caps and value toward the 'Magnificent Seven' mega-cap technology stocks since March. — A shift by a major institutional player toward mega-cap tech provides support for those specific names over smaller risk assets.
+0.30JP Morgan maintains a constructive long-term view on European value stocks based on valuation grounds. — Institutional support for European value based on fundamentals provides a floor for these assets despite near-term headwinds.
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