Kolanovic Sees Higher Risk Potential In 2017, Volatility Not Properly Priced

While JPMorgan’s Marko Kolanovic is positive on US stocks in 2017, market risks will increase and volatility is being underpriced by as much as three points. Chief among those risks will be the strong US dollar, he writes in an 82-page “2017 Equity Derivatives Outlook.”

Higher US dollar likely to negatively impact US large cap stocks, emerging markets

US Treasury Yields and the US dollar are correlated: they both travel higher and lower in price together. With multiple interest rate hikes on the table in 2017 and a host of unknown fiscal and trade policies to come, uncertainty could be the only certainty in the coming year. This will impact investors next...