HomeMarket NewsJPMorgan Prefers Defensive Sectors like Healthcare, Utilities, Staples, and Energy

JPMorgan Prefers Defensive Sectors like Healthcare, Utilities, Staples, and Energy

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JPMorgan suggests that defensive sectors will see increased demand towards the year-end, leading the firm to favor sectors including Utilities, Healthcare, and Energy over more traditional cyclical sectors.

β€œWe anticipate another downward movement in cyclicals,” stated JPMorgan in an investor note. β€œWe have a positive outlook on healthcare, utilities, staples, insurance, telecommunications, and energy.”

Regarding Healthcare (NYSEARCA:XLV) (VHT), the bank noted that the sector has recently shown signs of recovery, and earnings in the industry are expected to remain resilient in the current macroeconomic climate.

Furthermore, JPMorgan highlighted that Consumer Staples (NYSEARCA:XLP) (VDC) may have reached a bottom. While not excessively cheap, the sector has significantly corrected from the high P/E ratio it reached last year.

JPMorgan also emphasized the positive momentum in earnings for Utilities (NYSEARCA:XLU) (VPU). β€œWe believe that power prices will remain high, providing further support for the sector’s earnings.”

Regarding Energy (NYSEARCA:XLE) (VDE), the firm noted that the sector is currently trading at historically low valuations due to recent price-sensitive actions taken by OPEC.

Source: Benzinga.com

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