Marko Kolanovic Flags Iran ‘Tail Risk’ After Soleimani Strike. Says Investors Should Hedge Into US Election

"It is about a month since we published our 2020 outlook and despite having one of the most bullish targets on the street, the market has already realized more than half of our projected 2020 return", JPMorgan's Marko Kolanovic writes, rather dryly, in a new note out Wednesday. Or maybe it's not "dryly". That's one of the best things about Marko - you never really know if he's just deadpan and matter-of-fact, or whether he's employing some ironic humor in the course of reminding you that more t

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One thought on “Marko Kolanovic Flags Iran ‘Tail Risk’ After Soleimani Strike. Says Investors Should Hedge Into US Election

  1. What happens if the real economy does not respond to the CB actions? What happens if pricing power is subdued, unit labor costs rise, margins are squeezed and investments suffers?

    More cowbell?

    What happens if the faith in monetary policy lessens?

    I suspect a Wil E Coyote moment that leads to recession or worse.

    If earnings decline 10% or more the PE contraction could be enormous. 10yrs would be 50bps with supply increasing 50% (demand for safety outstripping supply).

    Far fetched? I don’t think so. Sentiment (PEs) can flip on a dime.

    Even if earnings increase 5% we could easily have a down year.

    All one needs to remember is risk is a four letter word and it could happen quickly.

    I see opportunity skewed to the downside while not taking too much risk if I am wrong. I may have a bit more pain but I think this discussion may be more visible in 6 months.

    Not to mention if Dems sweep Nov. impossible? No. Unlikely, yes. 2022 would be the sweep.

    Smoke ’em while you can. Be safe and smart.

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