The former chief market strategist at JPMorgan, Marko Kolanovic, is offering his outlook on the US stock market in his first interview since leaving the trillion-dollar bank.
In a CNBC interview, Kolanovic says a correction could be incoming for the US stock market amid a loss of momentum by stocks such as the electric carmaker Tesla and the analytics software firm Palantir Technologies.
-->The analyst also warns that the equities are trading close to record high levels, but America is still staring at the same issues that triggered a stock market correction earlier this year.
“That [loss of momentum] could be a catalyst for a bit of a correction because close to all-time highs, but we still have all the problems. We have a trade war, we had a sort of signs of economic slowdown, valuations are back to highs. So that’s sort of what I’m kind of expecting – a little bit of a pullback here.”
Kolanovic believes that a potential pullback could ultimately reward patient investors, provided the likelihood of a US economic contraction does not significantly increase.
“There are some cheap aspects of US markets as well, and maybe wait for that garden variety sell-off that can be maybe 5, 10.
And if we still don’t have the recession probability shooting up, then it’s a buy opportunity. But I would keep an open mind that maybe at that point there is increased probability of recession and maybe even that 5 is not a buy at that [point].”
