JP Morgan remains overweight US stocks, says miners "very attractive"

According to strategist Mislav Matejka, US corporate earnings were continuing to "deliver" and the negative correlation between stocks and bond yields would continue to hold, acting as an automatic stabiliser.

Furthermore, the spike seen in the Chicago Board of Options Exchange's VIX volatility index had produced a buy signal, he said.

"We entered the year with a non-consensus cautious EM view and worries over the potential counter-trend USD rally and hawkish Fed," Matejka explained.

"Now, most are bearish EM, bullish USD and are hawks on the Fed. We think one should be again contrarian with respect to all of these."

To take note of, the strategist did not agree with the view that the Fed would continue to tighten policy "until something breaks", anticipating that the central bank would provide 'put option' if volatility continued to remain high.

An escalation in trade tensions remained a "concern" but it need to be an "inevitable outcome", especially if US economic growth and stockmarket performance was no longer diverging from the rest of the world.

As for emerging market shares, their price-to-earnings multiples had de-rated and being below were they were in 2015-2016, appeared to be "cheap" in a historical context.

"Bond yields should move higher from here, which is typically positive for beta sectors."