Kolanovic leaves JPMorgan after series of poorly timed stock calls

Unlock Editor’s Digest for free

FT editor Roula Khalaf picks her favourite stories in this weekly newsletter.

Marko Kolanovic will step down as JPMorgan’s chief global markets strategist, ending a 19-year tenure that culminated in a series of poorly timed calls on the U.S. stock market.

Kolanovic, also co-head of global research at the bank, was one of the few bearish strategists left on Wall Street, having recently predicted that the S&P 500 would fall nearly 25% from current levels by year-end.

Once dubbed “the man who moves markets” by CNBC and “Gandalf” by Bloomberg, Kolanovic’s star has fallen in recent years due to a series of conflicting and ultimately mistimed calls on the direction of the S&P 500.

Two years ago, it advised clients to take an overweight position in U.S. stocks during the market’s sharp decline, before recommending an underweight position in early 2023. The bank has maintained that position ever since, although the blue-chip index has jumped more than 40% since then.

Kolanovic, who earned a doctorate in high-energy theoretical physics from New York University and later worked at Bear Stearns and Merrill Lynch before joining JPMorgan, will now “explore other opportunities,” according to a person familiar with the situation. Kolanovic did not respond to a request for comment.

Hussein Malik will become sole head of global research, having previously been co-head of the department with Kolanovic, a bank spokesman said.

Dubravko Lakos-Bujas, JPMorgan’s head of global equity strategy, will now lead market strategy in a new role spanning equities, multi-asset research and macroeconomic research. Steve Dulake and Nick Rosato will co-lead “fundamental research,” a new team that brings together credit and equity research under one leadership structure, the bank confirmed.

A JPMorgan biography shared with the Financial Times praised Kolanovic for his “timely and accurate short-term forecasts of stock market returns,” noting that he was inducted into the Institutional Investor Hall of Fame in 2020 “after 10 consecutive years of ranking No. 1.”

He and other JPMorgan strategists reiterated their bearish outlook in a note to clients last week, highlighting what they described as a “terrible” lack of breadth in the U.S. stock market.

“Since last year, we have argued that a soft landing (for the US economy) would be difficult to implement. On the contrary, a soft landing would be more likely with high interest rates for a long period until growth yields to tight monetary policy and a more benign macroeconomic backdrop,” the team wrote in late June.

Despite their preference for high-quality, large-cap stocks, the team admitted to having “underestimated the resilience (of the Magnificent Six) in terms of price momentum and earnings revisions,” referring to the handful of stocks that have generated the vast majority of the S&P 500’s recent gains.

The index hit a new all-time high this week. The stock-weighted S&P 500 index, however, has remained largely unchanged over the past two and a half years, while the small-cap Russell 2000 index has gained just 0.3% in 2024.