While there are plenty of factions making dire predictions about an equity market drawdown, those forecasts are wrong, says JPMorgan Chase & Co. strategist Mislav Matejka, according to an article in Bloomberg. In a note this week, Matejka and his team advised investors to “[L]ook through the widespread ’slowdown’ calls,” and to remain “bullish on banks, mining, energy, insurance, autos, travel, and telecoms.”

That optimistic outlook came on a day that was volatile in the European markets as geopolitical tensions increased in Ukraine. Indeed, with rising inflation and indications of hawkish pivots from central banks, 2022 has seen a difficult start for global equity markets. The European benchmark Stoxx 600 index is down nearly 5.8% and the S&P 500 has dropped around 8.8% so far this year, the article continues.

This slowdown has seemingly validated bears, some of whom predict an end to equities’ enormous rally caused by rising rates and a less flexible environment, with Michael Hartnett of Bank of America going so far as to forecast that rising “rates shock” will result in “recession shock” and telling clients to short equities. But Matejka is insistent in his optimism, writing in his note that it would be wrong to plan for a recession as conditions are still quite favorable, labor markets are still strong, and corporations and banks have extremely healthy balance sheets. Backing up that optimism is data released this week that shows improved output this month from manufacturers and service providers as well as an easing of supply-chain bottlenecks alongside rising demand and job growth.

However, ahead of those releases, Matejka and other JPMorgan strategists stated that Eurozone earnings growth will outperform U.S. growth this year, according to the article, and emphasized weighting in favor of European value shares over more expensive sectors in the U.S. and abroad.