JPMorgan Strategist Predicts Equities Rally to Lose Momentum amidst Bank Turbulence and Oil Shocks

JPMorgan strategist Marko Kolanovic predicts that the current risk-on mood driving the equities rally is likely to wane. According to Kolanovic, headwinds from bank turbulence, an oil shock, and slowing growth are poised to send stocks back towards their lows from 2022.

Kolanovic believes that recent inflows into stocks have been driven by systematic investors, a short squeeze, and a decline in the Cboe Volatility Index, or VIX.

Despite rising interest rates that have slowed growth, triggered bank collapses, and dented corporate profits, stocks have remained resilient this year. However, Kolanovic describes the present market backdrop as “the calm before the storm”.