Kolanovic Warns On War, Policy Risks

Kolanovic Warns On War, Policy Risks

"The most recent increase of geopolitical and monetary policy risks puts our 2022 price targets at risk," JPMorgan's Marko Kolanovic said Friday. For most of 2022, JPMorgan maintained a generally constructive, if increasingly cautious, view, predicated in part on the notion that central banks wouldn't commit an egregious policy error while attempting to tame the hottest inflation in a generation. With the Fed bent on what some, including Jeremy Siegel and Jeff Gundlach, worry may be an overzea
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14 thoughts on “Kolanovic Warns On War, Policy Risks

  1. Bad news, bad news, bad news. It is what it is. Markets are not looking at all favorable for the next year. It will be helpful if Russia doesn’t use atom bombs on the battlefield, and when the war in Ukraine finds some form of resolution. Maybe by January of 2024 we’ll begin to see some of the mess getting picked up and set straight?

    Lehman was a huge mess, but with a different scope. This thing we’re looking at today involves the entire civilized world and its markets. At the moment, all I can do is take a deep and throw up my hands – and realize that I’m going to have to be very patient.

  2. Contrarian indicator for me. :/ Sorry.

    I am buying stocks that have defensible double digit annual growth over a 3-5 year time horizon with 4-5+% free cash flow yields and moats.

    I also have a longer term time horizon that is a huge competitive advantage imo.

    Is Powell Bernanke? I think not……………………………….. I can’t believe the Fed is not shaking in their boots. Inflation is not going to be an issue in 6-9 months whereas an ’08 dislocation will be felt for a decade.

    Even if he is Bernanke a lot of the names I am buying are doubles in 4-6 years.

    I don’t buy the “market” I buy stocks.

    1. It’s a ride … or you might call it a jaunt through the fun house. I enjoy it. I don’t get cocky about it because I was bitten on the fanny a few times when I was younger. In recent years, holding small-cap tech or fintech for 12-24 months entertains me pretty well.

    1. Hmmmmmmmmmmm

      Do you really think his prior calls were based on stubbornness?

      Maybe my memory is selective but it seems for a while now his calls have not been great.

      I don’t see anything in this latest that is “new”. That many stocks were already pricing this in.

      Feels like reading last month’s paper today………………………..

      Personally, he is just not all that insightful. But few on the sellside are. :/

  3. IMHO The fed needs to strike the right balance between what they say and what they do. They can continue to raise if they talk a little less hawkish. Clearly hawkish talk and 75bp raises will lead to problems.

  4. With Kolanovic (finally) rolling over, I seriously have to think about going long on the market. Hell, if Tom Lee joins him (he won’t) then it is time for the market to turn up for 10-15% jaunt.

    To be fair, Kolanovic had some great calls during the long bull market, including some periods in which his forecasts for pullbacks were timely. But he seemed not catch on to either the regime change or its ramifications. His reasoning for the change seem cosmetic.

  5. H-Man, somewhat ominous that K seems to be throwing in the towel. The market will eventually rebound, as it has done in the past, but when it rebounds you don’t want to be a pauper with no powder.

  6. Spent the morning reading all about LDIs and mounting credit risk. Given the elevated inflation readings from, well, everywhere, I think the Fed is desperate to avoid a BoE-style pivot. It has to remain its inflation-fighting credibility, but it doesn’t want to precipitate a run on the global financial system. A slow-ish unwind of the leverage that has built up in the system since the GFC would be its Goldilocks scenario. Which suggests to me it may take its foot off the gas a bit in November, opting for a 50bps hike instead of 75 while hoping for the best, on both the inflation and global systemic-risk fronts.

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