Not hiking will confirm the market's fear of a banking collapse similar to 2008.
His guess is Fed doesn't hike, although they "Should".
The liquidity crisis is expected to pass soon, but a credit crisis is looming.
This credit crisis will likely affect small businesses' access to credit rather than large corporations.
Quick views from JPM's market intelligence team: "The events surrounding the banking crisis as consolidating views around the end of the tightening cycle. While inflation is not yet"cured", growth remains robust, and we may have seen the de facto end of QT. Combine this with lower yields/real yields and a re-expanding Fed balance sheet and we could see a tactical rally led by Tech.
The bull who became a bear, Mislav at JPM, has the following to say: "We stick to our call that Q1 will likely end up the high point for stocks this year. While parts of the market look short term oversold, and there could be potential relief bounces, we advise to use these to sell into. It is unlikely that we will have a fundamental low reached until the Fed is well advanced with rate cuts....The yield curve is likely to be proven right, as every single time in the past."
Oil price hates higher MOVE. "While triggered by recessionary concerns about oil demand, we believe that the jump in interest rate volatility, and related VAR-driven liquidity shocks have exacerbated the selloff, as investors took off losing oil positions. Exhibit 4 shows that declines in long-dated oil prices have recently coincided with increases in the MOVE measure of interest rate volatility, which has jumped to a post-2008 high. The interaction of negative gamma effects in options markets and banking-sector stress has likely also amplified the selloff."
https://www.zerohedge.com/technology/not-esg-friendly-insurers-junk-entire-evs-minor-accidents
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