JP Morgan analyst Marko Kolanovic has a poor risk:return for US stocks next year

<p>JP Morgan analyst Marko Kolanovic sees a poor risk to return for US stocks next year. </p><ul><li>In the 'bullish scenario' he projects stocks outperforming bonds or cash by around 5%</li><li>But, if there's a recession he forecasts stocks to underperform cash by about 20%</li></ul><p>He says that even if the US economy escapes a recession a sustainable rally is not going to happen unless Fed rates fall.</p><ul><li>This is a catch-22 situation, in which risk assets can’t have a sustainable rally at this level of monetary restriction, and there will likely be no decisive easing unless risky assets correct (or inflation declines due to, for example, weaker demand, thus hurting corporate profits)</li><li>This would imply that we would need to first see some market declines and volatility during 2024 before easing of monetary conditions and a more sustainable rally</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.