JPMorgan says supply chain pressures are easing, time to buy S&P 500 and these stocks

Published Tue, Nov 9 20212:00 PM ESTUpdated Tue, Nov 9 20212:22 PM EST

Supply chain bottlenecks have plagued companies and investors, but JPMorgan sees an end in sight to the disruptions. The Wall Street firm said it's a good time to buy the overall market and certain supply chain stocks. "Global supply chain pressures are easing — if this persists S & P 500 should continue to deliver strong revenue growth and record margins," said Dubravko Lakos-Bujas, JPMorgan's chief U.S. equity strategist and global head of quantitative research. Lakos-Bujas said third-quarter earnings do not support a pessimistic view around supply chains, after S & P 500 companies posted 16% year-over-year revenue growth. "S & P 500 companies delivered much stronger than expected results and some key companies gave an encouraging outlook on supply chains," he added. "Our view all along has been that supply and labor shortages would be temporary and normalize with a decline in COVID-19." JPMorgan spoke with industry experts and determined that the supply chain disruption should be dispelled in the first half of 2022, which will lead the S & P 500 to the 5,000 around that time. "With early signs of supply chain headwinds easing, we believe it is an opportune time to segment companies using our JPM Smart Buzz Sentiment engine," Lakos-Bujas said. The JPM Smart Buzz engine analytically measured corporate and investor sentiment on supply chain drivers such as cost of goods sold and freight during year-to-date corporate presentations. JPMorgan recommends investors buy the S & P 500, which it sees topping 5,000 by the middle of next year, or several supply chain stocks where corporate sentiment is favorable. Take a look at the list here: JPMorgan's list is full of materials, industrials, consumer discretionary and consumer staples stocks. The names are expected to grow sales and earnings over the next 12 months. Companies like Nike , Coca-Cola , Ralph Lauren , General Mills and V.F. Corp made JPMorgan's list. Last month, Coca-Cola CEO James Quincey told CNBC that he expects to see sporadic shortages on grocery shelves through 2022. "My analogy would be it's a bit like an earthquake," Quincey said on CNBC's "Squawk on the Street." "You get further shock waves coming through, but they tend to be of diminishing magnitude." Other names like A.O. Smith , Aptiv , Celanese , Fastenal and W.W. Grainger earned spots on JPMorgan's list. Martin Marietta , Newell Brands and Sysco are also faring well amid supply chain disruptions. — with reporting from CNBC's Michael Bloom.

File photo showing workers in a Nike factory near Ho Chi Minh City work at a production line conveyor belt, putting together Nike sports shoes.

Peter Charlesworth | LightRocket | Getty Images