The Blubber

Per Business Insider

JPMorgan strategist Marko Kolanovic has recently commented on the stock market. While others are trying to seize the bull stock market, the strategist says that a recession could still happen.

Kolanovic released a statement urging people to still be cautious while reportedly remaining underweight equities while being overweight cash. The strategist also commented on how a recession was likely necessary to reach target inflation.

Kolanovic: "While the economy's recent resilience may delay the onset of a recession, we believe that most of the lagged effects of the past year's monetary tightening have yet to be felt and ultimately a recession will likely be necessary to return inflation to target,"

The strategist then further commented on how they remained defensive during the situation and how they thought that equity risk-reward remained poor. It was also noted that there was a "disconnect between equities and bonds."

Kolanovic: "As such, we maintain a defensive asset allocation and believe the risk-reward for equities remains poor given the disconnect between equities and bonds, high likelihood of a recession over the coming quarters, high rates, tightening liquidity, rich valuations, and the still-narrow market breadth."

In March, Kolanovic gave a note to JPMorgan clients regarding the bank's thoughts on the Feds. During that time, it was noted that "a soft landing now looks unlikely."

During that time, they maintained that the Feds were past the point of no return and that the firm, along with multiple backs, had all rewritten their forecasts regarding a recession.

In April, Fed staff reportedly projected a mild recession that was expected to happen later in 2023. This came as policymakers scaled back their interest-rate hike expectations for this year after the banking turmoils.

During that time, officials also stressed the need to watch incoming data and find out how deeply an anticipated credit card crunch would slow the economy.

See flow at unusualwhales.com/flow.

Other News:

• JPMorgan says Feds are past the point of no return: 'a soft landing now looks unlikely'
• Fed staff projected a mild recession starting later in 2023

Resources:

Business Insider