Investing.com - "Goldilocks" US economic data and solid corporate earnings may give investors "room" to increase their market exposure as long as there are no "major negative surprises" regarding President-elect Donald Trump’s tariff plans, according to analysts at JPMorgan Chase (NYSE:JPM).
Recent data has shown that so-called "core" inflation -- stripping out volatile items like food and fuel -- rose by less than anticipated in December, while other figures pointed to resilient consumer spending activity and a labor market that is on stable ground.
Meanwhile, quarterly earnings last week from several major Wall Street lenders, a possible bellwether for the state of corporate America, were mostly robust thanks in large part to a renewal in dealmaking activity.
The numbers have revived hopes among some analysts for a so-called "goldilocks" scenario, in which the economic backdrop is ideal for equities.
Citing their Tactical Positioning Monitor, a gauge of client exposure to US equities, the JPMorgan analysts said that while positioning did not reach a level last week to trigger an "attractive" setup, it is around levels hit in late April, early August, and early September last year.
"Thus, there’s room for positioning to increase [...] due to ’goldilocks’ macro data and strong earnings, absent major negative surprises on the tariff / policy front," they wrote.
Trump, who is due to be sworn in as president on Monday, has threatened to slap sweeping import tariffs on allies and adversaries alike. However, the Wall Street Journal reported on Monday he will stop short of imposing the levies on his first day in office, instead asking federal agencies to look into US trade policies and evaluate America’s trade relationship with China, Mexico and Canada.