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JPMorgan’s Kolanovic sees stock market recouping 2022 losses and end the year flat


Top Wall Street strategist Marko Kolanovic said he’s staying optimistic amid the market volatility, calling for the S & P 500 to recoup this year’s steep losses and finish 2022 unchanged. “We remain positive on risky assets due to near record-low positioning, bearish sentiment, and our view that there will be no recession given supports from US consumers, global post-COVID reopening, and China stimulus and recovery,” JPMorgan’s Kolanovic said in a note. The strategist believes the market has already priced in tighter monetary policy from the Federal Reserve, adding that inflation may have peaked. “Despite the steep selloff, we believe that markets will recover YTD losses and result in a broadly unchanged year. This is now an out of consensus ‘bullish’ view, with most strategists now negative,” Kolanovic said. The S & P 500 has fallen more than 14% this year as the Fed started to aggressively hike interest rates to combat an inflation at 40-year high. The equity benchmark also briefly dipped into bear market territory on an intraday basis last month before bouncing back a bit. JPMorgan’s Kolanovic was one of the few on Wall Street who correctly called the March 2020 bottom and the subsequent rebound. He was promoted to chief global markets strategist from the bank’s head of macro quantitative and derivatives strategy in 2021. The strategist said some segments in the market are now trading at all-time lows relative to valuations, including innovation-focused companies, China ADRs, small caps and biotech. Kolanovic said the most attractive investment opportunities are in these oversold sectors that provide “asymmetric upside.”

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