Dubravko Lakos, chief global stock strategist at JPMorgan, thinks that the rally in the US stock market has probably come to an end this year. He sees many downside risks that can potentially lead to a stock market crash by the end of 2023. The strategist outlines several factors to support his suggestion. First of all, he points to a high price-to-earnings ratio, meaning that stock values are too high relative to earnings. For instance, the average P/E ratio of the S&P 500 components is close to the levels last seen in the 2000s which is perceived as the upper limit for these companies. Secondly, Lakos warns that investors have become overly bullish in their positioning, in stark contrast with early 2023 when the sentiment was mainly bearish. The analyst predicts that the Fed’s policy will most likely remain tight, and the regulator will keep interest rates high until the end of the year. “I just have a hard time believing that inflation is going to come down and the Fed is going to be cutting rates,” the strategist says. Moreover, the federal budget policy is expected to be more stringent next year, thus impacting economic growth. Finally, Lakos remains skeptical about a soft landing for the US economy. “There is no landing, no landing until you get to a hard landing. I do not buy into the soft-landing thesis,” he reiterates. What is more, the expert sees a potential recession looming.