Top Wall Street strategist Marko Kolanovic is sticking to his guns amid a sharp market sell-off, looking to see the S&P 500 rebound and finish 2022 flat. “We believe the market’s revaluation of rates has gone too far and the Fed will now be astonishingly surprised at the relative price curve in the curve,” JPMorgan’s Kolanovic said in a note. The strategist believes that investors have been very pessimistic on fears of an extreme recession, noting that the consumer remains strong as the economy reopens. Kolanovic said, “Market prices outweigh the risk of a substantial downturn, and we believe a near-term slowdown can be avoided due to consumer strength, COVID reopening/recovery and policy stimulus in China.” could.” Kolanovic’s outlook is more optimistic than most Wall Street strategists, many of whom are calling for a recession as the Federal Reserve fights rising inflation with higher rates. The S&P 500 dropped 3.2% on Monday and set a new intraday low for the year. After trading briefly on an intraday basis about three weeks ago, the benchmark is now back in bear market territory, down nearly 21% from its record. JP Morgan’s Kolanovic was one of the few on Wall Street to correctly call the bottom of March 2020 and the subsequent rebound. He was promoted from the Bank’s Head of Macro Quantitative and Derivatives Strategy to Chief Global Markets Strategist in 2021. However, Kolanovic has been very bullish during the sell-off this year. But he sees that the market is finally rebounding and there is already a lot of pessimism in the stocks. Kolanovic said, “We also see strong support from lower investor positions, depressed sentiment and corporate buyback inflows. While we expect the market to recover to end YTD losses almost flat in H2, we expect the market to recover.” Do not advocate indiscriminate buying of broad-risk markets.” Rather than buy the overall market, Kolanovic favored segments that sold strongly and are trading near record low relative valuations, including innovation-focused companies, China ADRs, small caps and biotechs.
