On August 12, JPMorgan Chase & Co. chief global markets strategist Marko Kolanovic provided details regarding the company's stock. The report showed four reasons to be optimistic about securities. At the same time, Kolanovic is anticipating a correction in the stock market.
The company rallied in the Q2 of 2021, according to the analysis. The expert noted that investors refrained from buying riskier assets due to the Delta variant outbreak. However, the situation improves and the company’s shares and bonds may correlate soon.
"We believe that bond yields and cyclicals bottomed last week and are now on an upward trajectory for the rest of the year," Kolanovic said. He also added that the stock-bond correlation weakened. All stock sectors show a negative correlation to bond prices. Kolanovic thinks that this may be a sign that volatility is unlikely to occur in the near future.
The expert underlined that currently, the share of funds in stocks is small. Therefore, investors have a good opportunity to buy up more stocks. At the same time, there are many risks that may undermine the bullish outlook. For example, a spike in government bond yields and a mass sell-off in quickly growing sectors that survived the pandemic. Kolanovic said that a significant correction could hardly hamper the sectors’ growth at the beginning of 2021.
