(Bloomberg) -- With stocks clawing back from a deep sudden swoon, Wall Street is chattering about the market Cassandra who warned that this would happen, until it cost him his job: former JPMorgan Chase & Co. strategist Marko Kolanovic.
The celebrity bear’s abrupt departure from the banking behemoth on July 3 after a 19-year stint had finance pros wondering if it was a sign of a market top, since prominent pessimists are typically shown the door during market frenzies. Now he increasingly appears to be vindicated. And Wall Street is noticing, at least based on what traders and strategists are saying on social media and in emails and texts to reporters.
The S&P 500 Index just concluded its worst three-day run since June 2022, and while it’s up Tuesday, Monday was its biggest one-day decline in nearly two years. The US stock benchmark is down roughly 5% in the five weeks since Kolanovic left JPMorgan, and the technology-heavy Nasdaq 100 Index has lost more than 10% to enter a technical correction.
“While market tops and bottoms are processes, Kolanovic’s departure came at what is essentially the exact top for stocks, particularly for mega cap tech, making the event even more legendary less than a month after it occurred,” said Dave Mazza, chief executive officer at Roundhill Investments.
READ: Kolanovic Departure Triggers an Echo on Wall Street From 1999
Kolanovic did not respond to multiple requests for comment.
Comments rippled across financial Twitter during Monday’s stock cascade, with everyone from retail to professional investors discussing the celebrity forecaster.
Before his departure, Kolanovic was one of few vocal pessimists left on Wall Street as stocks staged a ferocious rally that began last fall. Despite the latest selloff, the S&P 500 is up almost 28% since bottoming on Oct. 27. Peers at megabanks like Goldman Sachs Group Inc., Citigroup Inc., and Deutsche Bank AG steadily lifted their US stock forecasts. Even Wall Street’s other prominent bear, Morgan Stanley strategist Mike Wilson, loosened his bearish view.
But Kolanovic held firm. He saw mounting headwinds, from a slowing economy to a rapid momentum unwind within the technology high-fliers that comprised much of the market’s gains. After his exit, Wall Street pros compared the departure to that of Charles Clough in 1999, who left Merrill Lynch & Co. after his bearish calls failed to materialize through the relentless dot-com rally. By 2000 the tech bubble began to unwind.
“The market tends to sacrifice one prominent bear just before it flames out,” said Steve Sosnick, chief strategist at Interactive Brokers. “We won’t know for some time whether that is indeed Marko, but I found the timing to be rather auspicious then, and still do.”
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