JPMorgan Chase & Co.’s Marko Kolanovic is taking a defensive approach to markets amid a flare up in geopolitical risks and restrictive monetary policy, saying government bonds look cheap and the “time is coming to position for the long duration trade.”
As investors closely watch the Israel-Hamas war that broke out earlier this month, Kolanovic is adding “marginally” to both bonds and gold GC00, -0.01%, the note shows. “Bond yields have been moving up strongly, pricing in the higher for longer stance by the Fed, as well as the deteriorating demand-supply balance, among other things,” said Kolanovic.
The recent jump in bond yields is “problematic for investor sentiment and for the economy,” making their levels unsustainable, according to the JPMorgan note.Goldman Sachs Group GS, -1.94% said Tuesday that its third-quarter revenue in global banking and markets business was driven by strong performances in fixed income, currency and commodities as well as equities.