JPMorgan's Kolanovic is again pounding the table for stocks — but one market is close to triggering an ominous signal

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One key analyst is again making the case for equities. But beware what the fixed-income market is saying.

Since the last time influential JPMorgan strategist Marko Kolanovic told investors to buy the dip, the S&P 500 SPX, +1.89% fell by another 3%. That’s hardly a freezing cold take, but at the very least a bit early.

His bottom line is that the Federal Reserve tightening should not derail the current cycle. “Similar to the 2004-2006 Fed tightening cycle, the current cycle is taking place in a backdrop of above average nominal [gross domestic product] and [earnings per share] growth, which should allow the equity market to easily outperform cash and fixed income over the coming years, even if one assumes some gradual derating,” he says.

The chart Everyone’s talking about Russian-Ukrainian tensions through the prism of its impact on energy. Less well known is the degree to which Russia supplies the palladium market, a vital commodity for catalytic converters, fuel cells, jewelry and dentistry, among its other users. Strategists at UBS note that when palladium prices have climbed in January, it was generally on days when Russian assets weren’t stressed.

UBS UBS, +1.30% rallied in Swiss trade after the bank said it would buy back up to $5 billion in stock following a stronger-than-forecast fourth-quarter profit. The teen who has annoyed Tesla CEO Elon Musk by tracking his private flights is looking to expand his venture to track other billionaires.

 

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