JPMorgan Chase & Co.’s chief markets strategist Marko Kolanovic is trimming risk in the bank’s model portfolio this month in the wake of questionable central bank policy and rising geopolitical tensions.
Kolanovic, who has been Wall Street’s most vocal bull this year, cut the size of both the company’s equity overweight allocations, or the expectation of the stock to outperform its industry in the market, and bond underweight allocations, or the outlook of the bond to underperform. “Given the recent escalation in hawkish rhetoric, the likelihood of central banks committing a policy mistake with negative global consequences has increased, and this started showing in various cracks in FX and rates markets,” Kolanovic earlier wrote in a note dated Oct.3. “Even if a mistake is avoided, a delay will likely be introduced for the global market and economic recovery.”
“We expect the global expansion to continue to display resilience through the middle of next year given an unwind of adverse supply shocks, a material slowing in inflation, and a healthy private sector,” he said in the note on Monday.