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JP Morgan: Charts show new market highs are coming soon, led by bank stocks

  • J.P. Morgan predicts the market will rally to new all-time highs in the next few months.
  • The firm's technical analyst also believes bank stocks will be a key driver for the S&P 500's coming rise.
A man incarnating a 'Toro de Fuego' (bull of fire) chases people during the San Fermin Festival on July 8, 2017, in Pamplona, Spain.
Ander Gillenea | AFP | Getty Images
A man incarnating a 'Toro de Fuego' (bull of fire) chases people during the San Fermin Festival on July 8, 2017, in Pamplona, Spain.

J.P. Morgan's chart expert is telling clients to ignore recent market worries, predicting the S&P 500 will rise to new highs.

"Technicals continue to suggest consolidation within a late-cycle rally. Look for new highs in the months ahead," Jason Hunter, head of global fixed income and U.S. equity technical strategy, said in a note to clients Wednesday. "Even if the market folds back into the Apr-May holding pattern and spends more time ranging above critical support in the 2,500s, the 2018 price action still looks like a consolidation within an intact late-cycle bull market."


Hunter predicts that if the S&P 500 can break through resistance around the 2,800 level, it will then soar to new highs. The market hit its current all-time high on Jan. 26, reaching 2872.87.

The strategist also believes bank stocks will be a key driver for the market's coming rally.

"We continue to think Financials can lead the S&P 500 Index break to new highs this summer and the relative performance of that sector versus the broad market can recouple with rates over that period," he said.

The S&P 500 is up 2.2 percent this year through Wednesday, while the Financial Select Sector SPDR Fund, a widely followed bank stock ETF, is up 0.9 percent.