JPM’s Kolanovic Warns Complacency Has Set In, Expects A Market Pullback As Volatility Returns
by Tyler Durden
ZeroHedge.com
Feb 2, 2017
After a phenomenal 2015, in which JPM’s head quant Marko Kolanovic as if by magic managed to correctly call every major market inflection point ahead of time, he found 2016 far more challenging, although toward the end of the year, he did get a second wind, and his key predictions since the Trump election have panned out, as he himself note in his latest note:
One day after the US election, we set a January 2017 S&P 500 price target of 2300. Now that this target was achieved a week ago, we want to assess the prospects for stocks and market volatility. We maintain that in 2017 we will likely see further equity gains (our 2017 YE target is 2400).
Of course, there are 11 months until the end of the year, and what happens inbetween could have a major impact on the final December 31 S&P500 print. So what does Kolanovic think will happen next? As he says, “we believe the market will be more volatile and note that two-thirds of our projected target have already realized. This means that the market risk-reward has deteriorated.” And, in taking the opposite view of Goldman which predicts markets will keep rising until the end of the first half only to turn lower into the second half, Kolanovic expects the most likely downside scenario “would be a short lived ~5% pullback on the back of a hawkish Fed and deleveraging of systematic investors during the first half of this year.”
So only a 5% move?
The Rest…HERE
