Morgan Jr. strategists said that the risk of economic recession is still there, and the worst situation for US stocks may not be over yet.

(AFP file photo)

[Financial Channel/Comprehensive Report] JPMorgan (JPMorgan) strategist Marko Kolanovic (Marko Kolanovic) said that US stock market investors think that the worst of the stress has passed, and such expectations may prove wrong because Recession risks remain.

"Bloomberg" reported that the US Federal Reserve (Fed) raised the benchmark interest rate by another 0.25 percentage points (1 yard) last week to the highest since 2007. Many traders believe that this will be the last 1 of the current monetary tightening cycle. rate hike.

Market pricing suggests investors expect the U.S. central bank to start cutting interest rates before the end of the year.

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What the stock market and the broader risk market refuses to acknowledge is that if rates are cut this year, it will be either because the economy is in recession or because there is a major crisis in financial markets, Kolanovic said in the report.

Kolanovic has been one of the most bullish on Wall Street during the stock market sell-off in 2022, but as the economic outlook deteriorated, Kolanovic cut his outlook in mid-December, January and March. Stock allocation in the portfolio.

JPMorgan said that compared with the end of the previous economic cycle, the rotation rate of the market into the defensive zone is at a historically low level, which also means that the risk of economic recession is far from being digested.

The US banking crisis is expected to amplify the cumulative impact of the Fed's tightening policies.

Other headwinds for investors include a narrowing gap between bond markets, stock markets and the Federal Reserve, and a looming deadline for raising the U.S. debt ceiling.

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