#7 - JPMorgan Chase (NYSE:JPM)
The last stock on this list is arguably the best of the bank stocks, that being JPMorgan Chase (NYSE: JPM). Financial stocks are likely to perform well in the event of a tapering event. That’s because once the tapering starts, interest rate hikes are the next likely step.
Higher interest rates could potentially slow down the pace of the company’s consumer and commercial lending. However, the pace of increases will be measured. In the meantime, the bank will benefit from being able to charge slightly more interest on its lending without paying out too much more to depositors.
And by investing in JPM stock, investors also get access to the company’s fortress balance sheet that was recently strengthened when the bank added $3 billion that is was setting aside in loan-loss reserves.
JPM stock is up 63% in the last 12 months and 28.5% in 2021 which outpaces the growth in the S&P 500 Index.
About JPMorgan Chase & Co.
JPMorgan Chase & Co is a financial holding company, which engages in the provision of financial and investment banking services. It focuses on investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. It operates through the following segments: Consumer and Community Banking (CCB), Commercial and Investment Bank (CIB), Asset and Wealth Management (AWM), and Corporate.
More about JPMorgan Chase & Co.- Current Price
- $210.09
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 10 Buy Ratings, 9 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $254.83 (21.3% Upside)
The Fed’s annual meeting in Jackson Hole, Wyoming may provide some clues about when the Fed may begin to taper its asset purchases. Or not. The Delta variant is creating new concerns about the pace of the economic recovery. And that may be just the reason the Fed needs to take a more “measured” approach.
But even without the Delta variant, it’s entirely likely, and even probable, that nothing substantial will occur. But it’s best to be prepared because tapering is more a question of when and not if. The last significant tapering event occurred in 2013. At that time, investors rotated out of growth and cyclical stocks. Defensive stocks performed the best.
And although this presentation focused on individual equities, now could be a good time to consider investing in high-quality exchange-traded funds (ETFs). This would give you exposure to some areas like technology without having to rely on the performance of any one stock.
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