Marko Kolanovic, the former chief strategist at JPMorgan and one of Wall Street's most prominent bears, has called the recent stock market rebound "bizarre," after previously reveling in the Middle East crisis and the selloff in KOSPI and semiconductor stocks. He believes equities should have fallen further given the surge in oil prices. Kolanovic maintains that technology stocks continue to outperform energy stocks and argues that a 25% "air pocket" of steep decline awaits semiconductor-related names and a Korea exchange-traded fund.
On the 3rd, Kolanovic posted more than 10 messages on X (formerly Twitter) over the course of a single day, sharply criticizing the market's rebound. The previous day, U.S. markets had shown resilience: while the Dow Jones Industrial Average slipped 0.13%, the S&P 500 rose 0.11% and the Nasdaq Composite gained 0.18%.
Kolanovic expressed disbelief that stocks did not give back their gains despite international oil prices surging nearly 15% overnight amid escalating Middle East tensions — and that tech stocks outperformed energy stocks. "Oil is up 12% and the market is flat and energy is underperforming tech — bizarre," he wrote. "Everyone is playing games with the market."
He added: "Given a 10% oil rally, mechanical selling from risk-parity funds, de-risking ahead of the long weekend, war escalation, and the reversal after month-end effects, the market should have closed near its lows." He suggested "the market is probably waiting for another (fake) positive headline."
On semiconductor stocks leading the rebound, Kolanovic wrote: "There is a 5% air pocket below the market right now, and especially a 25% air pocket below AI momentum and memory stocks." He called the sharp rally over the past 24 hours in SanDisk, Western Digital, Micron, and EWY amid geopolitical turmoil "one of the most foolish things I have seen in my career," attributing it to "optimistic reports from equity analysts who have no grasp of the macro situation." EWY refers to the iShares MSCI South Korea ETF, the leading U.S.-listed Korea investment ETF.
Kolanovic compared the current environment to the "complacency" seen in the early days of the COVID-19 pandemic. He warned that statistics showing gas stations and airlines grinding to a halt would soon emerge, much like the daily case counts during COVID-19. "At some point a recession will look unavoidable, and this is not a trade war that can be canceled with a (Trump) tweet," he wrote.
Kolanovic displayed a similar posture a month earlier during the U.S. airstrikes on Iran and the accompanying KOSPI plunge. When the KOSPI index tumbled 7.24% on March 3, he boasted: "Didn't I call the war date and the Nikkei and KOSPI crash?" He pointed to the 12% pre-market drop in EWY at the time and mocked investors as "people wearing blinders." Targeting SK hynix (000660.KS), he dismissed the memory price rally as excessive, calling it "a temporary phenomenon, like selling a bottle of water for $100 in the desert."
Once dubbed "Gandalf" for his uncanny ability to read market trends, Kolanovic stubbornly clung to his bearish call during the historic bull market of 2023–2024 and was forced out of JPMorgan in an inglorious departure in July 2024. Since returning to the sidelines, he has maintained his negative stance on equities.
