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Trump trade policy turns JPMorgan bearish on small and midcap stocks

Feb. 02, 2017 8:13 AM ETIJR, IWM, MDY, IJH, IWR, VB, VO, EZM, MVV, UWM, SAA, RWM, TWM, RWK, RWJ, TNA, TZA, MIDU, SCHA, UMDD, URTY, SRTY, VTWO, SCHM, SPSMBy: Stephen Alpher, SA News Editor1 Comment
  • It's a big swing for the bank which at the start of the year saw good things for small and midcaps thanks to Trump's promises of tax cuts and infrastructure spending.
  • The new administration's focus, however, appears to be on trade, says JPMorgan's Eduardo Lecubarri, which adds downside risk to the 2017 outlook. “We worry about big short-term shocks to the global economy at this stage of the game.”
  • Small and midcaps have been especially popular since the Trump election, with the S&P Small Cap 600 Index higher by 18% the last three months, and the S&P Mid Cap 400 by 14% vs. the S&P 500's 9% advance.
  • It's time to purchase some downside protection, says JPMorgan.
  • ETFs: IWM, TZA, TNA, UWM, VB, MDY, IJR, VO, SLY, IJH, MVV, SCHA, RWJ, URTY, TWM, MIDU, RWM, EZM, SRTY, SCHM, RWK, IWR, UMDD, VTWO, SAA

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