- JPMorgan’s Marko Kolanovic sees no reason to be bullish on the stock market despite record highs.
- Kolanovic reiterated his view in a note on Monday that the S&P 500 could fall 20% to $4,200.
- “We do not see stocks as an attractive investment at this time and see no reason to change our stance,” Kolanovic said.
Just one day after Morgan Stanley’s chief information officer Mike Wilson abandoned his bearish view on the stock market, JPMorgan’s Marko Kolanovic is hitting it off.
Kolanovich, Wall Street’s last big bank bear, reiterated his view in a note Monday that the S&P 500 will fall about 20% to 4,200, the lowest level since October.
“Given the very high valuations of equities, we do not believe they are an attractive investment at this time and see no reason to change our stance,” Kolanovic said.
U.S. stocks have hit record highs over the past week, with the S&P 500 index trading just above 5,300 and up more than 11% since the start of the year.
Kolanovic acknowledged that his bearish view on stocks has hurt the performance of his multi-asset portfolio over the past year, but he has seen signs of weakness among lower-income consumers and interest rates. Combined with the high level, interest rates are likely to remain in a restricted range for a long time. Kolanovic said given the geopolitical uncertainty, now is not the time to be bullish.
And AI won’t save the stock market.
“We don’t believe that a narrow topic like AI chips can compensate for all the challenges of traditional markets, which have historically gone against cycles,” Kolanovic said.
For Morgan Stanley CIO Mike Wilson, continued strength in corporate earnings and the potential for operating leverage to accelerate revenue growth in 2025 helped change his view from bearish to bullish.
But Kolanovich doesn’t necessarily see it that way, writing in a note Monday that for S&P 500 returns to meet investors’ expectations in 2024, the third and fourth quarter It said EPS growth should accelerate by 16% compared to the first quarter.
“This is unlikely, especially if the recent softening trend in activity data flows continues,” Kolanovic said.
The past few years have been tough for Kolanovic and his projections.
Wall Street’s most closely watched strategists were bullish on the stock for most of the 2022 bear market decline, only to turn bearish near the bottom in mid-October 2022. Since then, Kolanovic has remained consistently bearish on the stock through 2023 and 2024. The S&P 500 index realized his increase of more than 40%.
