Investors should not expect a major rebound in U.S. stocks and should look overseas for bigger returns, according to a top JPMorgan strategist. Marko Kolanovic said in a note to clients on Monday that the buying opportunity for U.S. stocks created by the sell-off in February and March has faded. "Markets have recovered a majority of their early-March sell-off and thus no longer look oversold, while risks remain elevated around geopolitics, policy tightening and growth. As such, we take profit on the tactical increase to our equity OW initiated last month," Kolanovic wrote. Kolanovic said in a March 17 note that investors should shift back into risk assets. Between March 16 and April 8, the S & P 500 rose about 3%. The index did slip 1.3% last week. However, Kolanovic did not say investors should ditch stocks completely. The strategist said investors should look outside the U.S. to find more upside while holding on to their energy stocks. "While the US appears to be on an aggressive tightening path, China is expected to ease as soon as this month. As such, we increase our OW of EM vs. DM stocks. We also maintain our large strategic OWs of Commodities and Energy stocks given structural supply/demand drivers," Kolanovic wrote. The strategist rose to prominence in 2020 for being one of the few Wall Street pros to correctly call the market bottom. Kolanovic has remained mostly bullish overall in recent months even as stocks have struggled. Overall, Kolanovic is still relatively optimistic about U.S. stocks. His S & P 500 price target for the end of the year is 4,900, which is 9% above where the index closed on Friday. — CNBC's Michael Bloom contributed to this report.
People walk along Wall Street near the New York Stock Exchange (NYSE) on February 16, 2022 in New York City.
Spencer Platt | Getty Images
Investors should not expect a major rebound in U.S. stocks and should look overseas for bigger returns, according to a top JPMorgan strategist.