Underweight stocks now, says JPMorgan, because there's a risk-free alternative paying 5%

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JPMorgan wants to know why you are still holding U.S. stocks.

The new quarter kicked off with a fresh shock for investors after several major oil producers decided to cut more than 1 million barrels of oil per day from circulation starting next month.

Among the extra wary out there is JPMorgan, who in our call of the day says the risk of holding stocks, particularly in the U.S. where they advise an underweight, is no longer worth it. The strategists don’t think the early-year activity upswing, fueled by Europe’s falling natural-gas prices and China’s reopening, will continue feeding gains.

Also there’s a sentiment issue, as they say from a very downbeat view six months ago, “investors are now net long the market, and the sentiment is near complacent.” The buzz Major oil companies — Exxon Mobil XOM , Chevron CVX , ConocoPhilips COP , BP BP and Shell SHEL — are climbing after those surprise production cuts from several members of the Organization of the Petroleum Exporting Countries and allies. The trigger for that was reportedly Saudi Arabia getting irked after a U.S. energy official ruled out replenishing the Strategic Petroleum Reserve last month.

 

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What is JPMorgan's risk-free 5% yielding alternative to stocks?

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