+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

JPMorgan's quant guru says value stocks will outperform in 2021-but tech will have to gain for the S&P 500 to hit his 4,400 target

Dec 17, 2020, 21:03 IST
Business Insider
Mario Tama / Getty Images
  • JPMorgan's Marko Kolanovic says value stocks will outperform in 2021, but technology stocks will also need to rise in order for the S&P 500 to reach the bank's target of 4,400 by the end of 2021.
  • "We have this quite optimistic S&P price target that cannot be achieved unless tech also goes up," Kolanovic told CNBC on Wednesday.
  • The bank's global head of macro quantitative and derivatives strategy recommends investors don't short tech, as there are still companies that are innovating and generating "decent revenues."
  • Visit Business Insider's homepage for more stories.
Advertisement

JPMorgan's Marko Kolanovic told CNBC on Wednesday that value and cyclical stocks will outperform in 2021. But in order for the S&P 500 to reach the bank's price target of 4,400 by the end of 2021, technology stocks will also need to gain.

"We have this quite optimistic S&P price target that cannot be achieved unless tech also goes up," the global head of macro quantitative and derivatives strategy said. He recommends investors don't short tech, as there are still companies that are innovating and generating "decent revenues." Tech stocks have rallied massively this year and have propelled most of the market's gains since March.

In 2021, Kolanovic sees value stocks outperforming, particularly stocks in energy, industrials, and financials sectors. But he also said that the value tide will "lift all boats," and tech stocks will continue to edge higher.

Kolanovic added that technology stocks will benefit from a broad inflow of money into equities as investors continue to shed their bond allocations.

Read more:Buy these 26 stocks poised to surge as China starts to dominate the electric-vehicle landscape, UBS says

"We think there is going to be some very broad index inflows into equities as investors reallocate from bonds to equity. So that's going to keep also that growth and momentum segment afloat," he said.

The quant guru said three "V's" will lead the stock market next year. A vaccine will drive economic growth, particularly in the second half of 2021, value and cyclical stocks will outperform, and volatility will decline.

Advertisement

JPMorgan has one of the most bullish S&P 500 forecasts on Wall Street, along with Goldman Sachs and Oppenheimer which both see the benchmark index reaching 4,300 by the end of next year.

You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article