Stocks would sink 20% if bond market expectations pan out: JPMorgan

The disconnect between equity and bond markets has widened in recent months, as the two asset classes signal different economic realities, JPMorgan analysts said in a note on Thursday.

"Bond markets are still pricing in a sustained period of elevated macroeconomic uncertainty, even if there has been some modest decline over the past three months. By contrast, equity markets look 'priced for perfection' with the S&P now above a fair value estimate looking through the rise in macroeconomic volatility since the pandemic," the note said.

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