JPMorgan Chase: A weaker dollar will benefit global equities, rather than drag down risk assets.

JPMorgan analysts believe that while investors are concerned that currency volatility could impact the stock market, a weaker dollar should support the stock market rather than harm it. JPMorgan points out that despite recent volatility in commodities, bonds, and crowded trades, economic growth momentum remains solid. Federal funds rate futures are currently pricing in a rate cut of approximately 55 basis points by the end of the year, providing a supportive backdrop for risk assets. JPMorgan holds a bearish view on the dollar, noting that historical data shows a weaker dollar typically correlates with stronger stock market performance, particularly in emerging markets. JPMorgan maintains a bullish stance on emerging market and commodity stocks and recommends investors buy metal assets on dips. In the European market, while a stronger euro may affect approximately 25% of dollar-denominated income, strong growth during periods of euro appreciation usually offsets this negative impact, with cyclical sectors typically rising in tandem with the euro.