JP Morgan Global Strategist Warns of Calamity: Get On the Ark; It’s Time to Worry

There is panic in the air for the JP Morgan global strategist based on Hong Kong. Marcella Chow is warning that oil is going to careen lower to $22. She’s panicked, worried, and everything in between. Her advice is simple: listen to Le Fly and board the ark, get long U.S. treasuries before it’s too late. The floods are coming and no one is safe.

The global strategist for the $1.7 trillion money manager says she’s on edge, her clients are panicky and she’s telling them to stash as much as 70 percent of holdings in bonds including U.S. Treasuries. Calm won’t return until China’s economy improves and central banks regain credibility with investors, she said. She’s waiting for oil to fall to as low as $22 a barrel, and in the meantime she’s battening down and trying to avoid volatility.

“Am I worried? Yes,” Chow said in a Feb. 15 phone interview from Hong Kong. “There’s so much uncertainty,” she said. “Equities might not be a wise choice.”

In September, she started telling investors to shift to a 70 percent weighting for debt from an equal mix of stocks and bonds. Since the beginning of October, the Bloomberg U.S. Treasury Bond Index has gained 2 percent, while a measure of global equities has lost 4.3 percent.

“Even though it’s tempting to hold cash given how crazy markets have been, it’s better to go for stable bonds,” Chow said. “At least you can generate a few percentage points in returns.”

“China’s growth stabilization story is still unclear,” said Chow, who sees e-commerce business as one bright spot in Asia’s biggest economy. “We have to wait and see what happens.”

“How much more down is there to go? I want to know too,” Chow said. “I’m not feeling very adventurous.”

It’s time to batten down the hatches; a great storm is coming, apparently.