JPMorgan's Marko Kolanovic, a widely followed strategist on Wall Street, cut his S & P 500 year-end target on Monday — but said he still expects strong growth for the year. Kolanovic now expects the broad market stock index to finish the year at 4,900, as compared with his previous forecast of 5,050. To be sure, the new target still implies upside of more than 10% from Monday's levels. The revision comes after Kolanovic told investors Thursday that geopolitical risk will subside in the next few weeks and that they can start adding risk back to their portfolios. Kolanovic reiterated that position Monday. "While Fed tightening remains the strongest headwind, we believe the market still has upside," Kolanovic said. "Investor sentiment is extremely poor and positioning very low. We have now cleared the much-anticipated Fed liftoff, and the economy is still normalizing from multiple Covid waves. Risks are largely frontloaded, setting up for a potentially more normal second half." He suggested investors add risk in areas like innovation, tech, biotech, emerging markets and China, as well as small caps. Kolanovic also cut his 2022 earnings estimates to $235 per share from $240 to reflect certain headwinds, though that still implies growth of 12% year over year.
A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 16, 2022.
Brendan McDermid | Reuters
JPMorgan's Marko Kolanovic, a widely followed strategist on Wall Street, cut his S&P 500