Turmoil in global equity markets due to the new omicron variant could be an opportunity for investors to rebuild positions, JPMorgan has said.
According to Bloomberg, the American investment bank suggested the latest evolution of the COVID-19 virus might ultimately be a positive for risk markets because it could signal that the end of the pandemic is in sight.
“Omicron could be a catalyst for steepening (not flattening) the yield curve, rotation from growth to value, selloff in Covid and lockdown beneficiaries and rally in reopening themes,” Bloomberg reported, citing strategists.
“We view the recent selloff in these segments as an opportunity to buy the dip in cyclical, commodities, and reopening themes, and to position for higher bond yields and steepening,” they added.
Earlier this year, Kolanovic, JPMorgan’s chief global markets strategist, has advocated reopening trades and defended value stocks as the pandemic has evolved, also claiming that markets overreacted to the threat of the delta variant, Bloomberg reported.