(Bloomberg) — The rout in tech, biotechnology and emerging-markets stocks may be nearly over, and it’s time for investors to start adding to beaten-down, high-beta positions, according to JPMorgan Chase & Co. strategist Marko Kolanovic.
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“While the commodity supercycle will persist,” the strategist said, “the correction in bubble sectors is now likely finished, and geopolitical risk will likely start abating in a few weeks’ time (while a comprehensive resolution may take a few months).”
Kolanovic sees “great opportunities in high-beta, beaten-down segments that now include innovation, tech, biotech, emerging markets,” he wrote in a research note. While investors have become increasingly concerned about inflation and a potential recession, he argues that won’t happen, though he’s not ruling out one in Europe or a further slowdown in the U.S.
The Nasdaq 100 Index closed in a bear market on Monday, joining a number of other global equity gauges including China’s CSI 300 and Germany’s DAX. The tech-heavy benchmark has bounced back since the first of several anticipated Federal Reserve rate hikes, and it’s now down roughly 15% from its November record.
The biotechnology sector has taken an even worse beating than tech, with the Nasdaq Biotech Index plunging roughly 25% from its August peak.
The market rallied on Thursday with the S&P 500 advancing 1.2% while the Nasdaq 100 rose by 1.2%.
(Updates with closing prices.)
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