JPMorgan Warns Stocks Are in ‘Calm Before the Storm’
- Past two weeks of inflows driven by short squeeze, fall in VIX
- Equities likely to ‘retest last year’s low,’ Kolanovic says
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A risk-on mood fueling this year’s equities rally is likely to falter, with headwinds from bank turbulence, an oil shock and slowing growth poised to send stocks back toward their 2022 lows, according to JPMorgan strategist Marko Kolanovic.
“The Fed indicated no intention to cut interest rates this year, yet risk assets are exhibiting an unprecedented rally, with European stocks trading near all-time highs and US stocks recovering recent losses,” Kolanovic wrote in a note to clients Monday. “We expect a reversal in risk sentiment and the market retesting last year’s low over the coming months.”