JPMorgan Chase strategist cautions of expanding market downturn amid increasing macro risks

(MENAFN) Marko Kolanovic, the chief market strategist at JP Morgan Chase, recently issued a cautionary note regarding the ongoing decline in US stock markets. According to Kolanovic, the past three weeks have seen the beginning of a selling process that may intensify in the face of escalating macroeconomic risks. These risks include the uptick in US Treasury yields, the robustness of the dollar, and the surge in oil prices.

Kolanovic elucidated that while the results of US corporate earnings for the current week might offer temporary respite, it would be premature to conclude that the market has weathered the storm. He emphasized that various factors contribute to the mounting downside risks. These include a prevailing sense of complacency regarding stock valuations, sustained inflationary pressures, diminishing expectations of imminent interest rate cuts by the Federal Reserve, and overly optimistic earnings projections.

In his note to clients following a more than 5 percent drop in the S&P 500 from its March 28 high, Kolanovic underscored his belief that the correction in the market is likely to persist. He pointed out specific sectors and investors' tendencies to overcommit to certain stocks as potential indicators of an impending negative market reversal. Amid these warnings, Kolanovic's analysis suggests a cautious outlook, urging investors to brace for further turbulence in the markets.



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