there are bulls and there are bulls and this highly regarded jpmorgan strategist has just made a provocative call on the energy prices the stock market can absorb according to marko kolanovic markets would be “fine” with 130 oil cl1 and a us 10year treasury yield tmubmusd10y above 25 on thursday morning crude was trading below 77 per barrel and the 10year yield was 154 markets have struggled in reaction to a surge in bond yields that in turn has been driven at least in part by the european energy crisis that has spilled over into crude though up on wednesday the techdriven nasdaq composite comp has retreated 6 from its record high set in september and the sp 500 spx was 4 below its peak to kolanovic the chief global markets strategist at jpmorgan the current energy and supply chain issues do not jeopardize but reinforces its rotation thesis he says green policies have contributed to the current crisis as it’s diverted capital from fossil fuel development though at a certain point higher energy prices will boost traditional energy capital expenditure oil at 130 or even 150 won’t derail the economy given the health of consumer balance sheets and total oil expenditures he argues “consumer balance sheets are now in a strong position and some reallocation of expenditures towards energy would not set back the economy and equity markets at the low end of the income range potential strain from high gas prices could be an issue but it can easily be addressed with a small fraction of current stimulus plans” says kolanovic investors should consider hedging for higher oil prices that could come from going long commodities and short bonds going long energy stocks or going long value and short growth “the most likely outcome of the current energy crisis is increased production at significantly higher energy prices which would stabilize the global economy and energy infrastructure but also temporarily slow down the energy transition” he says he leaves the “highmultiple growth sectors” like the nasdaq 100 nq00 from his buythedip advice “our highest conviction ideas remain energy equities and commodity materials industrials and financials and reopening covidrecovery reflation and consumer themes” said kolanovic