Risk-Reward For Equities Deteriorating: JPMorgan

Analysts at JPMorgan believe that in the short term, an anticipated pickup in buyback activity and positive 4Q earnings surprises may provide some support to equities as in the absence of a positive central bank catalyst, equity risks are skewed to the downside over the medium term. Dubravko Lakos-Bujas and colleagues said in their Jan. 26 research note on “US Equity Strategy” that they believe if the Fed continues to normalize, there is a high degree of risk that equities begin to price in a policy error. JPMorgan lowers 2016 S&P 500 EPS target to $120; US monetary policy may put equities at…