J.P. Morgan Asset Management: U.S. Stocks Still Have Upside Driven by Corporate Earnings
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JPMorgan Asset Management portfolio manager Jack Caffrey sees US corporate earnings growing 22%+ in 2026, calling the bull case intact despite sharp short-term pullbacks — even as Bank of America and Citi warn of crowded positioning and unfinished selling.
Why does he think US stocks can keep climbing?
One core argument: earnings are growing, and growing fast. Caffrey's roadmap — low-teens percent growth in 2025, 22% or above in 2026, a similar pace into 2027.
This means → he is not betting on sentiment or flows, but on the hardest line in equity analysis: companies are actually making more money.
He checked two risk gauges — the VIX (a measure of market fear) and credit spreads (the extra cost companies pay to borrow versus the government) — and found "not a lot of concerning signals."
Then how do you explain the recent selloff?
Caffrey stretches his investment horizon to 15 to 24 months and concedes that rallies and pullbacks are "inevitable" — but they will be "short and sharp," not trend-breaking.
In plain terms = he is not saying it won't drop; he is saying every drop is a brief episode. As long as earnings estimates keep getting revised upward, "the story still has legs."
This reflects a classic "earnings-anchored" mindset: if corporate profits don't roll over, short-term price swings are noise.
What is the other side of Wall Street saying?
Bank of America Securities said last Friday that the market has "too many red flags" and advised investors to take profits.
Citi strategists were more specific: traders are actively building short positions in US equities. Last Friday's nearly 5% single-day drop in the Nasdaq 100 did not fully clear long positioning. This means → downside risk may not be fully discharged yet.
In plain terms = Caffrey is looking at "how much companies will earn over the next two years"; BofA and Citi are looking at "how crowded positions are right now." Different time horizons, opposite conclusions.
Where is the market leaning right now?
US stocks have already rebounded this week; AI-linked trades are warming up for a second straight session.
Nasdaq 100 futures, S&P 500 futures, and Dow Jones Industrial Average futures all posted gains on Tuesday.
This reflects short-term capital voting with its feet — for now, the market leans toward Caffrey's "the earnings story isn't over" rather than BofA's "take the money and run."
Content is for reference only, not financial advice.