JPMorgan CEO Dimon warns: Market underestimates "geopolitical + fiscal" dual risks, wouldn't buy stocks or long-term US bonds at these prices.

```

JPMorgan Chase CEO Jamie Dimon has once again issued a warning, saying investors are underestimating the dual risks of geopolitics and fiscal challenges facing the global economy, and made it clear he would not buy stocks or long-term U.S. Treasury bonds at current prices.

According to CNBC, Dimon stated in a podcast interview released Monday night that the market has not fully priced in a series of threats, including the war in Ukraine, conflicts in the Middle East, and rising military spending amid growing government deficits. “I think these risks may be bigger than others imagine,” he said. This statement stands in stark contrast to the recent optimistic sentiment in the market— the S&P 500 index has risen nearly 10% so far this year.

Dimon's warning comes as JPMorgan Chase and its peers have just reported strong quarterly results, with significant growth in trading and investment banking revenue, further reinforcing the narrative of a resilient U.S. economy. Nevertheless, Dimon himself remains cautious; in his latest remarks, he holds a prudent stance towards both stocks and long-term bonds and maintains a restrained attitude towards the AI investment craze.

Risks Underestimated: Geopolitical and Fiscal Double Hazards

In his hour-long interview with Wilfred Frost, Dimon pointed out that current market pricing may not realistically reflect the probabilities of potential shocks. "Some risks may have been priced in, but what actually happens has not," he said.

Dimon's list of risks includes ongoing geopolitical tensions in Ukraine and the Middle East. He also warned that with expanding government deficits, rising military spending will further intensify fiscal pressure. He expects that America's long-term budget deficit will eventually force the market to reprice, and "bond vigilantes" will demand higher yields to compensate for holding government debt, thereby pushing interest rates higher. "My judgment is, this will eventually become a problem," he said.

Dimon also acknowledges that compared to previous decades, the global economy's reliance on energy has decreased, and overall resilience has improved. But he stresses this does not rule out the possibility of sudden turning points. "You may need more straws to break the camel's back," he said, "Even if this current war escalates again, that may still not be enough."

No Buying Stocks, No Buying Long Bonds: Dimon's Personal Stance

When asked directly about his investment preferences, Dimon was clear. Regarding long-term U.S. Treasuries, he said: "Personally, I wouldn’t buy." He believes that even if inflation falls to the Federal Reserve's 2% target, the 10-year Treasury yield "should be around 4% to 4.5%" and that bond prices have little room to rise.

On the stock market, Dimon maintains a cautious attitude. He stated that if a particular stock is "an outstanding investment opportunity," he would consider buying, but he would not enter the market for the overall index at current valuation levels.

This stance contrasts with recent market performance. Strong consumer spending, easing inflation pressures, and the continuing heat of the AI investment theme have jointly driven the S&P 500 index to a roughly 10% gain this year.

AI Craze: Dimon Compares to Dot-Com Bubble, Warns on Timeline Expectations

Regarding the ongoing AI investment boom, Dimon takes a prudent rather than dismissive stance, comparing it to the early boom era of the internet.

“The scale of capital invested is huge. Will those investments overall deliver returns? Most likely, yes, just like the internet,” he said. But he also cautioned that early internet giants like Yahoo and Netscape faded away, while true winners like Google and Facebook emerged later.

"But will those investments deliver as you expect, and on your expected timeline? Certainly not," Dimon said. This suggests that current market expectations for AI returns may be misaligned in timing and trajectory, and investors should be cautious about timeline assumptions embedded in valuations.

Risk Disclaimer and Exemption ClauseThe market is risky and investments require caution. This article does not constitute individual investment advice and does not take into account any user's specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investing based on this is at your own risk. ```