Market Update: Global Equities

Global equity markets continued their slow grind higher during May, while volatility across many asset classes, not just equities, plunged

J.P. Morgan Asset Management 11 June, 2014 | 12:13AM
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This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, J.P. Morgan Asset Management global market strategist Kerry Craig discusses current levels of market volatility.

The low volatility present in today’s markets may seem at odds with the sentiment that a correction in equity, and some credit markets such as high yield, is just around the corner. However, fears of a repeat of past years’ “summer swoons” appear to be unfounded. Economic data releases have largely met or exceeded expectations, there are signs that geopolitical risks may be fading (particularly in Ukraine) and, perhaps most crucially, monetary policy looks set to remain accommodative in the near future.

The downside of the “melt up” in equity markets is that this in itself has created worries about investor complacency, and that it will only be a matter of time until we are presented with a market correction. Although as John Templeton said, that bull markets “mature on optimism and die on euphoria” and it would be difficult to find anyone who truly feels euphoric about markets right now. 

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J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.