JPMorgan has struck an optimistic note on the year ahead for equities, arguing that the global backdrop is quietly shifting in their favour — though investors may need to brace for a bout of “travel and arrive” after this week’s Federal Reserve meeting.
Markets have already fully priced in a December rate cut, which the bank says leaves little room for upside in the immediate aftermath and raises the risk of some profit-taking into year-end.
Further out, however, analysts are markedly more upbeat. They believe the balance between growth and monetary policy is turning supportive, helped by milder inflation pressures from cheaper oil, easing wage growth and the possibility that tariff measures are softened.
That mix could keep bond yields anchored and central banks in easing mode well into 2026.
JPMorgan also flags a series of tailwinds peculiar to Europe: fading trade uncertainty, the chance of a brighter outlook for China, stepped-up fiscal spending in the Eurozone, and the ongoing surge in US investment linked to artificial intelligence.
Together, they argue, these could finally lift Eurozone markets out of the sideways churn that has persisted since March.
Sector leadership, though, is where JPMorgan sees the biggest shifts. The bank continues to expect rotation away from some of this year’s winners (notably defence stocks, as well as utilities and insurers), while banks should remain resilient.
Conversely, several of 2025’s laggards could come back into fashion.
Exporters, including autos and the so-called 'Granolas' of Europe’s consumer and luxury groups (GSK, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L'Oreal, LVMH, AstraZeneca, Sanofi, and SAP), are tipped to benefit.
Healthcare and semiconductors also sit in the bank’s preferred basket, with analysts expecting a stronger showing as global conditions improve.