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Recently, the U.S. stock market has experienced dramatic fluctuations, with the market experiencing its largest drop since September 2022 and its largest rebound since November 2022. Investors are paying close attention: Is the "adjustment" of the U.S. stock market over? Has the market bottomed out?

In this regard,JPMorgan ChaseThe attitudes are very cautious.

JPMorgan: Kolanovic's redemption?

Marko Kolanovic, a PhD in high-energy theoretical physics and former chief strategist at JPMorgan Chase, warned months before his departure that overcrowded momentum trades would eventually go haywire. The past week’s market turmoil may have given him reason to gloat a little.

Kolanovic’s former team, now led by Dubravko Lakos-Bujas, released a note on Thursday with the following thoughts on stock rotation, the Japanese market and carry trade unwinding:

"The stock market is no longer a one-way rally, but is increasingly a two-way game around downside risks, Fed policy timing, crowded positions, high valuations, and growing election and geopolitical uncertainty. The market focused on inflation in the first half of the year, but the focus is quickly shifting to growth risks in the second half...

We believe the current market correction is driven primarily by concerns about slowing economic growth and a repricing of recession probabilities.

Lakos-Bujas believes that the momentum factor is experiencing a major liquidation, which led to the global stock market crash last week.The team also warned that if a true growth scare occurs, it could trigger a massive flight to defensive stocks, which would lead to "bigger trouble":

“Historically, a complete reversal of the momentum factor has resulted in a 30% retracement… Currently, only about 34% of this retracement has been completed.

However, we do not believe we have reached the end of the cycle yet and therefore expect only a partial unwinding of momentum rather than a complete unwinding, although we are gradually approaching that.”

Another view from JPMorgan Chase's trading department was also slightly cautious., lists arguments for and against the market bottoming out. Among them, the arguments in favor include:

1. The recent fluctuations may be just technical selling, and the fundamental data does not support such large fluctuations.

2. Macro and micro fundamentals remain solid, GDP growth expectations are optimistic, and corporate earnings performance is better than expected.

3. The pullback is a normal phenomenon and is in line with historical laws.

The main reasons for opposition are as follows:

1. The Federal Reserve may delay rate cuts, triggering a negative reaction in the bond market.

2. CTAs have more room to sell.

3. Negative seasonal factors and geopolitical risks intensify.

As for whether the bottom has been reached? JPMorgan Chase's trading department said in a report that the market trend may move slightly higher from now on, "but the market still needs to see evidence that the economy is still in growth mode."

Goldman Sachs: Cautious but optimistic, believes that the market has bottomed out in the short term

comeGoldman Sachs，While the firm is equally cautious, it is slightly more optimistic, believing that the market has bottomed out in the short term:

"From here, the move will be choppy but upward.

The S&P 500 closed at an all-time high on July 16, just a stone's throw away from 5,700... The VIX volatility index hit 65 on Monday... This has only happened twice before... in November 2008 during the financial crisis and in March 2020 during the COVID-19 pandemic... The shock we are feeling won't disappear immediately, but we don't think anything terrible is brewing.

Buying a 5% pullback in the S&P 500 has proven to be a very smart strategy over the long term."

It is worth noting that unlike the past two years when the high consumer price index (CPI) caused a stock market crash, the market is now hoping that next week's inflation report will be slightly higher to avoid the economy falling into a deflationary spiral.

Overall, despite the market rebound, major institutions remain cautious. Investors need to pay close attention to future economic data and policy trends to determine whether the market has truly bottomed out.