-- JPMorgan analysts said they remained largely bearish on equities, and saw little impetus to change this stance amid high valuations, restrictive interest rates and sticky inflation. 

But JPM analysts said they maintained an Overweight position on commodities and cash, with supply disruptions and improving demand set to drive prices higher across a number of commodities. 

The brokerage said that while its negative stance on equities had hurt the performance of its multi-asset portfolio over the past year, it still saw little reason to turn bullish on equities. 

Higher interest rates, sticky inflation readings, increased investor positioning and valuations and geopolitical uncertainties kept the brokerage largely negative towards stocks.

“We don't think that narrow themes like AI chips can compensate for all of those traditional market challenges that historically worked against the cycle,” JPM analysts wrote in a note. 

U.S. stock benchmarks recently hit record highs, driven higher chiefly by technology on growing hype over artificial intelligence. This trade spilled over into global equity markets as well, drumming up valuations across EMEA and Asia. 

Still, among equities, JPM analysts said they preferred Japan and China over the U.S., with Japan set to benefit from increasing inflation and interest rate hikes by the Bank of Japan, while China’s equity rally is set to receive more support from stimulus measures and relatively cheap valuations. 

In commodities, JPM analysts said they expected oil prices to improve over the travel-heavy summer season, while weather risks for sugar and grains were intensifying, presenting potential price upswings. 

Copper- which had a stellar rally over the past week, could be due for some near-term consolidation, given that its recent rally to record highs was driven chiefly by a speculative frenzy, and not physical market conditions. But JPM analysts said they still remained “medium-term bullish” on prices.