To The Moon

J.P. Morgan's Marko Kolanovic (JPMorgan'schief global markets strategist, was one of the biggest bulls on Wall Street last year):

• Q1 high point for markets
• Fed more likely to pause, pivot only if recessionEnd of PMI rebound
• Sell into rallies
• Yield curve recession signal likely proven right

JPMorgan's Marko Kolanovic said in a note Monday that the possibility of a Minsky moment in markets and geopolitics has increased.

"The bailout of several U.S. banks did not manage to calm markets, which consumed another large bank in Europe," he noted. "In a Trichet-like moment, the ECB increased rates by 50bps."

JPMorgan's chief global markets strategist, was one of the biggest bulls on Wall Street last year.

Kolanovic acknowledged that the Fed is facing a difficult task on Wednesday but is likely already past the point of no return, and "a soft landing now looks unlikely, with the airplane in a tailspin (lack of market confidence) and engines about to turn off (bank lending)."

Kolanovic believes that even if central bankers successfully contain the contagion, credit conditions look set to tighten more rapidly because of pressure from both markets and regulators.

He also sees cracks beginning to emerge in U.S. credit fundamentals, adding that "Euro credit spreads will likely continue to widen unless we see meaningful policy intervention."

"The historical template for FX during widening credit spreads is for USD strength, coupled with relative safe-FX (USD, CHF, JPY) strength vs. high- beta," the analyst added. "We see little change in oil fundamentals and keep our price forecasts unchanged for now, while financial stress and macro uncertainty have boosted safe-haven demand for gold and silver."