JP Morgan's stock guru says oil won't hurt stocks until it hits $80

JP Morgan's chief quant Marko Kolanovic said rising oil prices should not hurt the stock market until it reaches $80 to $85 per barrel.

Marko Kolanovic, global head of macro quantitative and derivatives strategy, said when oil prices are stable, oil correlates positively with the S&P 500, but when there are large price increases, the correlation weakens and becomes negative.futures settled at $62.90 per barrel, up 14.8% in afternoon trading following the attack Saturday on Saudi Aramco facilities, knocking out more than half of Saudi Arabia's oil production. Oil had its best day since December, 2008.

He also sees both oil and natural gas prices moving higher, and that should drive energy stocks higher, accelerating a trend into value stocks.

This market is artificially inflated. It should be much lower give geopolitical and economy data. It is waiting for a wing and a prayer from the Fed.

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