S&P 500 to remain range-bound until a breakthrough on medical or economic front – JP Morgan

In the view of David Lebovitz, Global Market Strategist at JP Morgan Asset Management, the US equity indices, including the S&P 500, are unlikely to retest March lows and will remain range-bound going forward.

Key quotes

“Markets are probably going to remain range-bound here until we see some sort of significant breakthrough either on the medical front or on the economic front.”

I also think it’s important to recognize that the market has essentially written off 2020 and is wholly focused on 2021.”

“Part of what gives us a little bit more confidence that we’re not necessarily going to retest the lows that we saw in March is really the fact that we have a lot more information today around the virus itself, around what an economic lockdown looks like.”

“And while I wouldn’t be surprised to see some sort of pullback here and I think that would create an opportunity across the equity market broadly, I don’t think we need to go all the way back down to where we were in the month of March.”