It's not the first time a clash has broken out between JPM's mostly theatrical sellside research desk and the bank's formidable - and largely flawless - trading floor.
Back in November, when the market mega-meltup was just starting, JPM's trading desk issued a contrarian call and while most of the street was predicting a continued slide from the 5-month lows in the S&P, the JPM market intel group led by Andrew Tyler said that "I remain tactically bullish" and notes that there are "several bullish elements that support this view" to wit: "Stable growth with a disinflationary trend, positive earnings growth, positive technicals, a shift towards a soft landing narrative, and the end of the Fed’s hiking cycle."
What is amusing is that one of the most vocal bears challenging his optimism was none other than JPMorgan's "chief US equity strategist", a role which is something like the in-house propaganda head who lines up clients to take the opposite side of the bank's flow desk, Marko Kolanovic who at the same time published a note in which we doubled down on being bearish (and wrong) saying that while "falling bond yields and dovish central bank meetings were knee-jerk positive for equities” for short term, the "growth-policy tradeoff will remain challenging into year end" while the prospect of sustained elevated interest rates and slowing growth come back in focus. And “as the Fed is set to remain higher for longer at the short end, markets could start to price in a policy mistake, leading to lower long yields down the line, and that might not ultimately be helpful for stocks, especially if 2024 earnings projections start to reset lower.” In short, as we said at the time,
"JPMorgan's Uber-Bearish Marko Kolanovic Rages At JPMorgan Uber-Bullish Trading Desk."
Of course, what came next was a historic meltup, one which has pushed the S&P some 800 points higher and back to all time highs, and anyone who listened to Kolanovic - who has been catastrophic wrong for the past two years - and shorted the market is probably flipping burgers now.
