J.P. Morgan: Matejka, head of equity strategy, who has a very successful call in calling the bottom and being bullish throughout the spring – sounds more negative now.

1. Investor sentiment surveys are far from depressed, and positioning has recovered nicely, with retail investors strongly participating. Robust retail buying was historically not a great sign for future market performance.In fact, it was typically seen as a contrarian indicator

2. economic projections assume consumer behavior is largely normalized in 2H, but that might not work if the Covid-19 lingers.

3. the consumer, which accounts for 70% of GDP, and the US consumer hasn’t faced labour market weakness for 11 years. The risk is that the magnitude of a 2H bounce underwhelms, leading to levels of GDP and earnings in 2021 significantly lower than hoped for

4. US-China relationship is at risk of souring again, with the relapse into trade uncertainty even before the November elections are out of the way.

5. without the leadership broadening, the overall market direction could also struggle.