JPMorgan strategists see a higher chance of a Minsky moment.


[Financial Channel/Comprehensive Report] Marko Kolanovic, chief global market strategist at JP Morgan Chase, said that as the central bank struggles with high inflation, bank failures, market turmoil, and continued economic uncertainty have raised the The possibility of a "Minsky Moment."

"Bloomberg" reported that the Minsky moment was named after the late American economist Hyman Minsky, referring to the end of an economic boom.

This economic prosperity makes investors willing to take greater risks, inflates asset prices due to excessive speculation, and borrows more than borrowers can repay. At that time, any unstable event may force investors to sell assets in exchange for cash to repay the loan, causing the market to crash.

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JPMorgan strategists led by Kolanovic said in a report to clients on Monday (20th) that even if the central bank successfully contained the contagion, the pressure from the market and regulators made credit conditions appear to be on the mend. Faster tightening.

JPMorgan Chase predicts that the Federal Reserve will raise interest rates by 1 yard this week, and warns investors to be cautious about risky assets, and reiterates that this year's Q1 will be the annual high of US stocks, but investors can still take advantage of market turmoil to grasp the potential rebound and sell off.

Kolanovic recommends underweighting value assets and taking a defensive approach in portfolio allocation.

Kolanovic is one of those on Wall Street who are bullish on U.S. stocks in 2022. His target price for the S&P 500 at the end of 2022 is 4,800 points, but this is about 25% more than the actual closing price. He then began to lower his expectations.

Kolanovic currently has a target price of 4,200 for the index in 2023, which is about 6.3% higher than Monday's closing price.

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