(Bloomberg) -- Many analysts are convinced it’s time to pile into stocks on hopes the US economy will buck a hard landing in 2024 and the Federal Reserve is finished raising interest rates. Dubravko Lakos-Bujas, JPMorgan Chase & Co.’s chief global equity strategist, isn’t one of them.

“The market is pricing in effectively some sort of soft landing and many are calling for ‘Goldilocks,’ which is sort of the best of both worlds: Not too hot, not too cold,” Lakos-Bujas said in an interview in Sao Paulo last week. “That’s unrealistic.”

Instead, Lakos-Bujas sees peril for equities in 2024, as an economic slowdown is expected to pressure corporate earnings, with diminishing pricing power threatening margins. Add rich valuations, more crowded positioning and low volatility to the equation, and a “very vulnerable” set-up for stocks is in place, he said. 

Stocks are down 0.7% in early trading. The S&P 500 fell 0.6% in early trading Monday for its biggest drop in three weeks.

Lakos-Bujas said that while higher rates have been investors’ biggest worry, rate-cut bets have been driven by lower-growth expectations: Rates and inflation have come down due to decreasing demand, he argued, adding that “all these pretty lofty earnings expectations for next year are at risk of being revised low.”

Ahead of what he sees as a shaky economy next year, Lakos-Bujas recommends piling into defensive stocks like the utilities sector, an emerging “blue moon-type” opportunity that could help hedge against a recession. If a soft landing materializes, the space should also yield decent returns, he added. 

Many of JPMorgan’s peers predict US stocks will hit fresh record highs next year — in fact, the S&P 500 Index is up 20% this year. But the Wall Street bank is doubling down on bearishness, issuing a gloomy forecast after failing to predict a rally driven by a selective group of US firms this year.

JPMorgan expects US corporate earnings to grow between 2% to 3% next year, below the consensus estimate. And the bank flags expectations might be too high in a moment when the VIX — the equity “fear gauge” — trades near three-year lows.

On the prospects of a soft landing, Lukas-Bujas senses complacency. “Almost everybody is bullish. So I don’t know,” he said. “Maybe we’re the lone crazy people.”

--With assistance from Alexandra Semenova and Lu Wang.

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