JPMorgan’s Global Head of Macro Quantitative and Derivatives Strategy Marko Kolanovic says stocks are oversold following recent interest rate hikes by the Federal Reserve. The market has now settled into a view that the Fed will continue with “outsized” hikes, but investors should not should keep extrapolating the hawkish policy stance direction, Kolanovic tells investors in a research note. The analyst “some sees encouraging signs on the inflation front” given declining core goods as supply chains normalize further and the strong dollar puts downward pressure on input prices. “Meanwhile, some pre-conditions for a market bottom are falling into place: stocks are looking increasingly cheap and approaching deep-value outside of the US, and positioning is extremely depressed,” writes Kolanovic.
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