On May 16, JPMorgan Chase & Co. strategist Marko Kolanovic warned in a note to clients that the risk of a recession has dampened prospects for gains in U.S. stocks this year, while the impasse over the U.S. debt ceiling could be another headwind for stocks lower.
The chief equity strategist at JPMorgan reiterated his view of maintaining an underweight U.S. stock market, as stocks continue to price in a soft-landing scenario for the economy and are out of touch with the bond market.
The lack of progress in U.S. debt-ceiling talks is another reason to steer clear of U.S. stocks, as “a possible sell-off should the debt-ceiling issue persist to the last minute,” Kolanovic wrote.