JPMorgan says stocks reflect more positive than soft landing scenario

JPMorgan’s Global Head of Macro Quantitative and Derivatives Strategy Marko Kolanovic says the equity rally over the past two months “implies macroeconomic scenarios that are even more positive than a soft landing.” The strategist attributes the market’s rise to “mechanical re-risking,” due to the decline in volatility and emergence of the artificial intelligence-themed mega-cap rally. The level and increase of stock concentration in S&P 500 now is at 60-year highs, which “could be indicative of a bubble, and other anecdotal evidences point to an AI-driven bubble as well,” the strategist tells investors in a research note. The firm continues to think the delayed impact of the global interest rate “shock,” erosion of consumer savings and “deeply troubling” geopolitical impacts globally will result in market declines and re-emergence of market volatility. JPMorgan feels now is a “good entry point for a catch-up in commodities vs. equities.”