This my summary from a note via Marko Kolanovic, JPM's chief global markets strategist.
Says 4 reasons to remain bullish:
- impressive Q2 earnings results
- investors are remaining only cautiously positioned, funds are around average exposure, thus with room to allocate (ie buy) more
- says there are indications the Delta variant outbreak is beginning to recede (citing the effective reproduction number of COVID-19 infections is falling in 40 out of 50 states)
- the correlation between stocks and bonds is beginning to normalise (and bond yields have bottomed) he is an optimist still on the reflation trade
On potential risks:
- of a sharp rise in bond yields
- sell-down of hyper-growth stock sectors that benefited from the COVID-19 lockdowns
