BlockBeats News, May 26th, according to analysts from J.P. Morgan, the market is currently overpricing the risk of central banks potentially raising interest rates, creating conditions for a rebound in the lowest-volatility stocks such as essential consumer goods and utilities.

Despite investor concerns that the Iran conflict could cause an energy price shock, triggering another wave of rate hikes as seen after the 2022 Russian invasion of Ukraine, the J.P. Morgan team led by Mislav Matejka pointed out that the current macro environment is significantly different from back then.

In a research report, the strategists noted that as all sides involved in the conflict are ultimately striving for an "exit strategy," they expect bond yields and oil prices to trend downwards in the next 6 to 12 months. Furthermore, they predict that corporate earnings prospects will remain strong and believe stagflation is not the most likely macro scenario to emerge in the second half of the year. (FXStreet)