The last bear on Wall Street: Why JPMorgan’s Marko Kolanovic is sticking by his forecast for a 20% market sell-off

The last bear on Wall Street: Why JPMorgan’s Marko Kolanovic is sticking by his forecast for a 20% market sell-off

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  • JPMorgan’s Marko Kolanovic sees no reason to become bullish on the stock market despite record highs.

  • In a note on Monday, Kolanovic reiterated his view that the S&P 500 could fall 20% to 4,200 points.

  • “We do not view stocks as attractive investments at the moment and see no reason to change our position,” Kolanovic said.

Just one day later Mike Wilson, CIO of Morgan Stanley, abandoned his bearish stock market call, JPMorgan’s Marko Kolanovic persists.

Kolanovic is the latest mega-bank bear on Wall Street, reiterating his view in a Monday note that the S&P500 will fall about 20% to 4,200, levels not seen since October.

“With very high stock market valuations, we do not consider stocks to be attractive investments at the moment and we see no reason to change our position,” Kolanovic said.

U.S. stocks hit record highs over the past week, with the S&P 500 trading just above 5,300, a gain of more than 11% for the year.

Kolanovic acknowledged that his bearish view on stocks has hurt the performance of his multi-asset portfolio over the past year, but with interest rates likely to stay in restrictive territory for longer, combined with consumers at low With income showing signs of weakness and high levels of geopolitical uncertainty, now is not the time to become optimistic according to Kolanovic.

And AI won’t save the stock market either.

“We don’t think narrow themes like AI chips can offset all of these traditional market challenges that have historically worked against the cycle,” Kolanovic said.

In the case of Mike Wilson, CIO of Morgan Stanley, it was the continued strength of corporate earnings and the likelihood that earnings growth will accelerate in 2025 due to operating leverage that shifted his view from bearish to bullish.

But Kolanovic doesn’t necessarily see it that way, saying in his Monday note that for S&P 500 2024 earnings to meet investors’ expectations, EPS growth in the third and fourth quarters will need to accelerate by 16% per year. compared to the first quarter.

“This is unlikely, especially if the recent period of slowdown in activity data flows continues,” Kolanovic said.

It has been a difficult time for Kolanovic and his predictions in recent years.

The widely followed Wall Street strategist has been bullish on stocks through much of the 2022 bear market, to then fall downward in mid-October 2022. From there, Kolanovic remained consistently bearish on stocks throughout 2023 and 2024, when a more than 40% rally materialized for the S&P 500.

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