JPMorgan predicts a 10% rally for the S&P 500

Industrial and construction material stocks will be among the sectors that will benefit as U.S. markets hit fresh highs over the next year, JPMorgan Private Bank’s Grace Peters told CNBC Tuesday. Peters, head of equities strategy at the wealth management arm of the U.S. bank, told CNBC’s “Squawk Box Europe” that investors should be adding cyclical exposure to their investment portfolios in the next 12 months, to benefit from the economic recovery following the coronavirus crisis.

While there will also be further bouts of stock market volatility, she recommended using share price falls to add more cyclicality — which are stocks which see their prices move in line with economic cycles. More specifically, JPMorgan is advising investors to add cyclicality within areas of business that are seeing “structural growth,” such as digital transformation and health care innovation, as well environmentally-driven trends.

The private bank forecasts that the S&P 500 would rise to between 3,500-3,600 points by the end of this year and then 3,750 by September 2021, representing a potential 10% rise from its last close at nearly 3,352 points. In addition to technology and health care, Peters said this market rally would broaden out to other sectors such as industrial and construction material stocks.

JPMorgan predicts a 10% rally for the S&P 500 and names the U.S. sectors to watch, CNBC, Sep 29