JPMorgan: A weaker US dollar will benefit global stock markets rather than drag down risk assets

According to Odaily, JPMorgan analysts believe that despite investors' concerns that exchange rate fluctuations may impact the stock market, a weaker US dollar should actually support the stock market rather than harm it.

JPMorgan points out that although there has been volatility in commodities, bonds, and crowded trades recently, economic growth momentum remains solid. The Federal Reserve's federal funds rate futures are currently pricing in a rate cut of about 55 basis points by the end of the year, providing a supportive backdrop for risk assets. JPMorgan holds a bearish view on the US dollar, and historical data shows that a weaker dollar is usually associated with stronger stock market performance, especially in emerging markets.

JPMorgan maintains a positive outlook on emerging markets and commodity stocks, and recommends that investors buy metal assets on dips. In the European market, although a stronger euro may affect the conversion of about 25% of US dollar revenue, robust growth during periods of euro appreciation usually offsets this negative impact, and cyclical sectors typically rise along with the euro.