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

• 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."
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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.

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"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.

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.