Stocks Could Rally Even if Oil Prices Hit $150

By Senad Karaahmetovic

JPMorgan strategist Marko Kolanovic believes U.S. stocks will return to their 2022 highs even if energy prices surge up to $150 per barrel.

“There could be some potential further spikes in oil, especially given… the situation in Europe and the war. So, we wouldn’t be surprised,” Kolanovic said. “But it could be a short-lived spike and eventually, sort of, normalize.”

(WTI) is hovering around the $120 mark with its 3-month peak sitting at $120.96. Crude oil prices soared after Chinese authorities reopened and lifted lockdown restrictions in Shanghai after two months.

Kolanovic thinks the consumer will be able to handle oil prices at $130-$135 a barrel, something that we already saw from 2010 to 2014, he said. The strategist also believes the U.S. and global economy will not fall into a recession.

On the other hand, JPMorgan Chairman and Chief Executive Jamie Dimon warned investors about a possible economic “hurricane.” Kolanovic said it is crucial to prepare for all possible scenarios.

“We do forecast some slow down,” said the strategist, who has won multiple honors from Institutional Investor for accurate predictions. “Nobody is saying that there are no problems.”

JPMorgan forecasted the to end the year at around 4,900, while Kolanovic recently predicted in his note the index will stand at roughly 4,800 at the end of 2022 – still in line with its all-time highs it reached at the start of the year.