he benchmark S&P 500 index closed at a record high on Wall Street Friday, but sentiment could quickly turn as corporate profit margins appear to be peaking, according to analysts at JPMorgan.
Equities appear to be in demand because investors expect corporate profits to accelerate, supported by the bottoming out in activity indicators that is now in progress, analysts at the U.S. bank noted.
“However, the earnings reality might turn out to be the opposite as we move through the year. In aggregate, corporate profit margins are elevated in a historical context, and appear to be peaking out,” according to JPMorgan, in a note dated Feb. 26.
Equities appear to be in demand because investors expect corporate profits to accelerate, supported by the bottoming out in activity indicators that is now in progress, analysts at the U.S. bank noted.
“However, the earnings reality might turn out to be the opposite as we move through the year. In aggregate, corporate profit margins are elevated in a historical context, and appear to be peaking out,” according to JPMorgan, in a note dated Feb. 26.