JPMorgan’s Marko Kolanovic predicts oil is surging higher — but so are stocks.
Kolanovic, who serves as the firm’s chief global markets strategist and co-head of global research, believes the U.S. economy is strong enough to handle oil prices as high as $150 a barrel.
“There could be some potential further spikes in oil, especially given… the situation in Europe and the war. So, we wouldn’t be surprised,” he told CNBC’s “Fast Money” on Tuesday. “But it could be a short-lived spike and eventually, sort of, normalize.”
WTI crude is trading around three month highs, settling up 0.77% to $119.41 a barrel on Tuesday. Brent crude closed at the $120.57 mark. The bullish move came as Shanghai reopened from a two month Covid-19 lockdown, opening the door for higher demand and more upside.
“We think the consumer can handle oil at $130, $135 because we had that back in 2010 to 2014. Inflation adjusted, that was basically the level. So, we think the consumer can handle that,” said Kolanovic, who has earned top honors from Institutional Investor for accurate forecasts multiple years in a row.
His base case is the U.S. and global economy will avoid a recession.
But at a financial conference last week, JPMorgan Chase Chairman and CEO Jamie Dimon told investors he’s preparing for an economic “hurricane” which could be a “minor one or Superstorm Sandy.”
Kolanovic contends it’s vital to be ready for all possibilities.
“We do forecast some slow down,” he said. “Nobody is saying that there are no problems.”
His firm’s official S&P 500 year-end target is 4,900. But in a recent note, Kolanovic speculated the index would end the year around 4,800, still on par with all-time highs hit on Jan. 4. Right now, the S&P is 16% below its record high.
‘We don’t think investors will stick in cash’
“We don’t think investors will stick in cash for the next 12 months, you know, waiting for this recession,” Kolanovic said. “If we continue to see [the] consumer especially on the services side holding up — which we do expect — then we think investors will gradually come back into equity markets.”
Kolanovic’s top call remains energy, a group he has been bullish on since 2019.
“Actually, valuations went lower despite the stock price appreciation,” Kolanovic said. “Earnings grow faster, so multiples are actually lower now in energy than they were a year ago.”
He’s also bullish on small caps and high-beta technology stocks that have gotten crushed this year.
Sarah Jessica Parker, Matthew Broderick’s Son Shares Rare Family Photo
33 Best Extended Cyber Week Deals on Amazon
Aaron Rodgers says Jets’ playoff chances will factor into potential return
Man Utd icon Rio Ferdinand leaves TNT Sports studio during PSG vs Newcastle
Expense management software company Center is raising more cash
Feeding Tampa Bay serves hundreds a traditional meal for Thanksgiving
The Countach DiCaprio Crashed In Wolf Of Wall Street Is Going To Auction
Cruise CEO And Co-Founder Kyle Vogt Steps Down
How to Respond to Relatives Who Feel the Need to Comment on Your Food and Body
Chris Pine Has Heard Rumors of a Possible Dungeons and Dragons 2
Kate Middleton Never Breaks These 7 Beauty Rules
Globe Santa gave a little boy gifts years ago. Now he gives generously to others.
Prince William Doesn’t Think King Charles Is ‘Competent’ and Doesn’t Like the Way He’s Ruling, Expert Claims
The U.S. Is All-In On Green Incentives. Will It Work?
Bill O’Brien says that who starts at quarterback isn’t up to him
Tech20 hours ago
Tech Moves: Leafly board member departs; Uber Freight hires ex-Convoy comms lead
Finance22 hours ago
Taylor Swift’s Funflation: Best Buy’s Retail Warning
News12 hours ago
Tesla’s future riding on the Cybertruck
News17 hours ago
SEAN HANNITY: Biden is a ‘pathetic’ excuse for a president
Lifestyle12 hours ago
Egypt’s El Gouna Film Festival Set to Hold Special Edition Dec. 14-21 Following Postponement
Auto14 hours ago
Powerful Lotus EV Charger Adds 89 Miles Of Range In Five Minutes
News23 hours ago
E-commerce stocks rally after Black Friday shoppers spend record online
News14 hours ago
China expo first test of Xi-Biden rapprochement