JP Morgan’s Kolanovic doesn’t like stocks for H2 2023: “risk-reward remains unattractive”

JP Morgan’s Kolanovic says the second half of this year presents a ‘challenging backdrop’ for equities:

  • “We expect a more challenging backdrop for stocks in H2 and believe risk-reward remains unattractive”


  • given the decelerating economy
  • and a likely recession starting in 4Q23/1Q24
  • softening consumer trends
  • the significant re-rating of stocks so far this year

That last point he is referring to the move higher so far in 2023.

Kolanovic expects moderating growth in the second half, with stubbornly high inflation forcing central banks to retain their restrictive stance and potentially tighten further.

On subdued market action presently:

  • “Market volatility is unusually low given the high interest rates and risk of recession, which in our view is largely technical in nature, driven by short-dated option selling that creates a virtuous cycle between long gamma hedging and systematic strategy re-leveraging,”

This article was written by Eamonn Sheridan at Source