Rising oil and U.S. Treasury yields will increase near-term equity, volatility
but selling equities now is premature. Long-term inflation expectations remain
stable, corporate earnings and economic activity are improving, and Q3 results
could rebuild market confidence. The backdrop is relatively more supportive for
value stocks, especially as growth’s relative earnings advantage appears to be
peaking. High oil and yields are a market disturbance but have not yet changed
the fundamentals supporting equities. (JP Morgan report, Sep 15)
