Bloomberg: JPMorgan's Kolanovich backs off stocks amid risk of recession

15 November 2022 34
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Source: Bloomberg

Authors: Liantin Tu and John Cheng

ArticleOriginal article

Publication date: Tuesday, November 15, 2022

 

According to the latest report of Marko Kolanovich, co-head of global research at JPMorgan Chase & Co. and one of Wall Street's biggest bulls, he cuts the size of equity allocations on recession risk. 

 

He already reduced his equities position last month, as he was concerned about growing risks from central bank policies and geopolitics.

 

As reported by him, if interest rate is close to 5%, it will be difficult to avoid recession unless the Fed hints at change in policy. Despite the fact that he remains overweight equities and is positive in the long term, the strategist highlighted that JPMorgan would rely on rally seen last week to moderately cut the size of equity overweight.

 

According to him, JPMorgan can't be optimistic as there is high recession risk. In addition to this, the October CPI figures could be anomalous and/or couldn't force central banks to moderate aggressive interest-rate increases.

 

Kolanovich, the No. 1 equity strategist according to the last year's Institutional Investor survey, has not yet achieved much success with his bullish forecasts in 2022. This summer, he argued that the US stock market is set for a gradual recovery and that the S&P 500 will probably stay unchanged until 2023, and urged investors to purchase stocks when their prices drop.

 

Forecast: S&P 500 decline

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