JPMorgan Warns of Impending Stock Market Wipeout Due to Unknown Risks and Spiking Rates

JPMorgan's US equity research team warns that US stocks could be headed for a selloff due to some murky, unseen catalyst, with the risk of another unknown unknown resurfacing appearing high. The team argues that equity valuations are too elevated once the economy starts to slow, and the long-anticipated recession could begin during the fourth quarter or first quarter of 2024. The team expects a more challenging macro backdrop for stocks in 2H23 with softening consumer trends at a time when equities have rerated sharply.