By Senad Karaahmetovic

Last week’s close was 1.19% less as the market continued to trade choppy. With the U.S. futures market showing a positive start for a new week, the benchmark index is now trading almost 8% below its lowest levels.

Pre-open Monday saw the stock rise almost 1%, while trading was nearly 1.3% more.

For JPMorgan’s Mislav Matejka, the risk-reward in US equities is improving. According to the strategist, it could not turn out as a bear market rally because of the rise in equity prices.

A reasonable reduction in the number of P/E multiples is seen compared with a year earlier.

On the other hand, Morgan Stanley’s Michael Wilson argues that the largest S&P 500 weighs could be the next group of stocks that will significantly de-rate.

“The largest 5% of S&P 500 stocks are trading at a 40% median premium to pre-covid levels compared to 17% for the broader index. It could be said that the market works well, with the biggest and most stable companies acting most defensively in the index. However, this potentially presents a downside scenario as well where these stocks could be the final shoe to drop before we exit the current bear market,” Wilson told clients.

Apple (NASDAQ) Microsoft (NASDAQ), Amazon (), Alphabet (NASDAQ:), and Tesla (NASDAQ:) are the five biggest components of the S&P 500 by index weight.

Goldman Sachs’ Jan Hatzius holds the middle ground as he expects the markets to remain rangebound.

“Although financial conditions still look broadly compatible with the Fed’s goals, under our central economic forecast we don’t think the recent easing can go much further without triggering a fresh leg higher in terminal funds rate pricing, which would probably weigh on equities and credit. However, Fed officials could decide to increase the pace of the increases to 25bp or to cut them short quickly if there is a significant risk sale. If this happens, credit and equities could be supported again. For risk assets to break out of the range, we may need genuinely new information about the economy relative to our forecast,” the economist told clients ahead of the new trading week.