J.P.Morgan: Sell Off Presents Opportunity To Buy The Dip

Monday saw J.P.Morgan note that "the market sell-off that escalated overnight we believe is primarily driven by technical selling flows (CTAs and option hedgers) in an environment of poor liquidity, and overreaction of discretionary traders to perceived risks. However, our fundamental thesis remains unchanged, and we see the sell-off as an opportunity to buy the dip. We remain constructive on risk assets and last week upgraded our S&P 500 price target, given expectations of a reacceleration in activity as the delta wave fades and better than expected earnings. Risks are well-flagged and priced in, with stock multiples back at post-pandemic lows for many reopening/recovery exposures; we look for Cyclicals to resume leadership as delta inflects. We remain overweight Japan equities on tailwinds from political changes and a cyclical upswing, and favour EM equities given valuations and healthier macro fundamentals."