European, US markets could fall 15% 'below the lows we've already seen': Strategist - CNBC

A pedestrian wears a protective face mask as she walks past the London Stock Exchange in London, U.K., on Monday, Mar. 2, 2020.

Simon Dawson | Bloomberg | Getty Images

Markets, especially developed ones, could still hit new lows despite showing resilience and making gains amid the ongoing coronavirus crisis, one strategist told CNBC this week. 

U.S. stocks surged in early April as authorities announced policies to support the economy, while European markets have also lifted off March lows.

But Mark Jolley of CCB International Securities said he's "not sure how long it can last," and warned that stocks could still fall some 15% below their lows for the year.

He attributed the resilience to confidence in measures taken by central banks and governments, but said he doesn't see how the S&P 500 can be "sitting on a record forward (price-to-earnings ratios)" at a time when earnings are falling.

"My view would be that the rally that we've seen is a bear market rally," Jolley, a strategist, told CNBC's "Capital Connection" on Thursday.

"The problem is central banks can't stop the weakness we're seeing in growth, they can't stop the severe earnings decline that we still are going to get and they can't stop corporate bond defaults," he added. 

How markets perform going forward could depend on how "elevated" they are, said Jolley. 

Citing Hong Kong as an example of a market that is "not far" from its 2008 low in terms of price-to-book ratios, he said it could "retest" its lows.

"Other markets can go quite a bit deeper, in particular in the developed markets and especially Europe and in the U.S.," he said. "I think they can go maybe 10%, 15% below the lows we've already seen."

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European, US markets could fall 15% 'below the lows we've already seen': Strategist - CNBC
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