"Crashing as predicted, but only soaring" Wall Street's leading bear leaves JP Morgan

Marco Kolanovic, the global head of market strategy at JP Morgan, the world's largest bank, who had been warning clients against buying stocks amid a predicted market crash this year, has resigned, Bloomberg reported on the 3rd (local time).

Kolanovic is known as one of the few remaining prominent pessimists on Wall Street. Since November last year, he has maintained his year-end 2024 target price for the S&P 500 index at 4200. However, this year the S&P 500 index has repeatedly hit record highs due to the AI boom and expectations of interest rate cuts, rising 0.5% on the 3rd to reach 5537. The year-to-date increase amounts to 16.75%.

In March, Kolanovic told client investors that "the current stock market rally reminds me of the late 1990s dot-com boom and the post-COVID-19 pandemic surge." Regarding the three-week correction in April, when the emphasis was on delayed interest rate cuts, he claimed it was "the start of a sell-off." Although he acknowledged that his portfolio was hit when the market rebounded in May, he still advised against buying stocks due to high interest rates, high inflation, and geopolitical uncertainties. Last month, he also argued that the market's rise driven mainly by a few large-cap stocks like Nvidia was historically a bad omen.

JP Morgan is currently the only major financial institution forecasting the year-end S&P 500 index target below 5200.

While Kolanovic and JP Morgan maintain their bearish stance, other major Wall Street investment banks have raised their year-end S&P 500 target prices. Evercore ISI notably increased its target from 4750 to 6000 last month. Citigroup raised its target to 6000, while Goldman Sachs and UBS each raised theirs to 5600.

Mike Wilson, Chief Investment Officer (CIO) at Morgan Stanley, another known Wall Street pessimist, has also shifted to a bullish stance. He raised his S&P 500 target for the second quarter of next year to 5400.

Kolanovic earned nicknames such as "Gandalf" (the wise wizard from the movie "The Lord of the Rings") and "the man who moves the market" for his historically accurate market predictions. He also correctly predicted the market rebound during the pandemic-induced panic.

In an internal memo, Kolanovic said he was "looking for other opportunities" and declined to comment to major foreign media. Dubravko Lakos-Bujas, JP Morgan's global equity strategist, will succeed him as the global head of market strategy.