Chief Global Market Strategist for Xiaomo: The Risk of “Minsky Moment” Rising

According to reports, Marko Kolanovic, chief global market strategist at JPMorgan Chase, the turmoil in the US banking industry has made a soft landing of the economy unlikely, and increased the risk of “a Minsk moment in the market and geopolitics.”. Even if the central bank successfully curbed the spread of the crisis, due to pressure from the market and regulatory agencies, the credit environment is bound to tighten more quickly. “Minsky moment” refers to the final stage of excessive risk taking resulting from long-term economic prosperity; A destabilizing event may force investors to sell assets to increase their cash holdings, sending the market into a downward spiral. Kolanovic reiterated his view that the first quarter may be the peak of the US stock market in 2023, and recommended that customers sell while any market concerns ease and there is a rise; But he also pointed out that some markets appear to be oversold in the short term. (Bloomberg)

Interpretation of this information:

Marko Kolanovic, the chief global market strategist at JPMorgan Chase, warns that the US banking industry’s turmoil has increased the risk of a Minsk moment in the market and geopolitics. He believes a soft landing of the economy is unlikely and that even if the central bank successfully curbs the crisis’s spread, the credit environment is bound to tighten, causing a rapid increase in interest rates. A Minsky moment can result from excessive risk-taking, leading investors to sell assets to increase cash holdings, which exacerbates a market downturn. As such, Kolanovic advises customers to sell while any market concerns ease and the stock market peaks in Q1 2023, but he also points out that some markets may be oversold in the short term.