(Markets Insider) JPMorgan strategist Marko Kolanovic expects stocks to rise soon, warning that the recent decline is entering the “final stages” of the market correction.
Kolanovic says that fears over the expected rate hikes, which have fueled the market slump, are overdone.
The strategist says the bearishness in stocks contradicts the momentum in economic activity, pointing to easing supply chain bottlenecks amid expectations of a robust earnings season.
Kolanovic faults investors’ concerns of rising input prices, saying that margins will remain robust on the back of strong activity and prices that surpass wage inflation.
The comments by the JPMorgan strategist happen when the S&P 500 has shed at least 10% from its record highs, while Nasdaq has fallen by more than 15%.
The JPMorgan guru is optimistic that should the stock market’s bearish sentiment continue, the Federal Reserve will initiate policy changes to address the situation.
Investor sentiment hit a 10-year low last week, with CNN’s Fear and Greed Index entering the “fear” zone on Monday. The bearish sentiment is interpreted as a buy signal by contrarian stock investors.
S&P 500 is up +0.28%, NASDAQ 100 is up +0.49%.
