"Ignore The Fake News": Why Kolanovic Sees The S&P Rising To 3,100 In 2019

On Monday, we started our latest note profiling the most recent and fifth consecutive - since the S&P correction started - bullish outlook by JPM quant Marko Kolanovic, titled "Kolanovic Qu(a)ntuples-Down On Bullish", as follows:

It's become like clockwork: any time the market gaps higher, JPM's quant "Gandalf" is out with a new note "reminding" JPMorgan clients that now is the time to buy stocks.

And, as has been the case for much of the past two months, almost the very next day after Kolanovic advised JPM clients to "buy the dip", the market tumbled with the slide continuing on Thursday after the Wednesday market closure, and again Friday, as Kolanovic's latest sanguine outlook was promptly ignored by a market which found a new bogeyman to worry about, in this case the arrest of Huawei CFO Meng, nervous over what it means for the China-US trade truce.

Amusingly, it is none other than Kolanovic who earlier this week said the G-20 outcome would confirm that the "pain trade is to the upside" when he, it would appear in retrospect, was not aware of the tangential developments involving the Huawei CFO arrest and upcoming extradition. Instead of admitting that, an understandable excuse which would explain why his latest bullish call has once again been a money-loser for anyone who followed it, Kolanovic instead digresses into a bizarre tangent blaming "fake and real media", and "foreign geopolitical adversaries" - like, perhaps, Putin - to explain why it has repeatedly turned out that the pain trade was not to the upside and Kolanovic's trade recos have been wrong:

Fake and real media, domestic political opposition, and foreign geopolitical adversaries welcomed these policies and the instability created in foreign relations, the business community, and financial markets. We hope that some of this negative impact can be reversed, based on the recent progress made at the G20. Trade resolution could provide a much needed boost to equity valuations in 2019.

True, yet by the same token the incarceration of Meng could lead to a crash in risk assets and a "much needed" renormalization of valuations, one which eliminates the impact of some $15 trillion in central bank liquidity propping up asset prices, which has resulted in the longest "bull market" in history.

In any case, while most of Marko's recent bullish reports - which have all come at a time when virtually all of his sellside strategist peers have turned partially (Goldman) or fully (SocGen, Morgan Stanley) cautious - have been published when the market is enjoying a green candle, or at least an uptick, we were somewhat surprised that the JPM quant issued his "2019 Outlook for Markets and Volatility" today, with the market is tumbling once more and not to far from YTD lows (an outcome which, needless to say, Kolanovic failed to predict... again).

That said, we were not at all surprised that after five consecutive bullish reports (first on October 12, following the systematic puke, then one week later on Oct. 19, then again on Oct. 30  when stocks hit another recent lows, then once more on November 7  after the midterm elections, and most recently on December 3) Kolanovic was once again bullish, and today reveals that his year-end price target for the S&P is 3,100which makes Kolanovic one of Wall Street's more optimistic strategists.

While we have heard Marko's bullish, if not so accurate, tone quite often over the past two months ever since the market hit an all time high in late September, here is his explanation why one year from now he expected the S&P to be some 450 points higher. In a nutshell, the JPM strategist does not share the growing skepticism that a recession will hit in 2019 - or even be priced in - as "the business cycle will not end in 2019", a conclusion he reaches by looking at high frequency economic indicators, none of which hint at an imminent economic slowdown, while also assuming that fiscal stimulus - in China and Europe - will pick up next year even as monetary stimulus becomes a drag on growth as central bank balance sheet liquidity injections go into reverse for the first time since the financial crisis. To wit:

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