(Bloomberg) -- For corporate earnings, the first half of 2023 may be as good as it gets.

According to JPMorgan Chase & Co. strategist Mislav Matejka, profit margins are unlikely to be sustained near record highs as companies lose the ability to keep raising prices with inflation cooling and growth slowing.

“We were bullish on earnings for the past two years,” Matejka wrote in a note. While the second quarter “could still be resilient, we do not expect upgrades to the rest of the year,” he said. Matejka had turned cautious on the outlook for stocks toward the end of last year, a call that hasn’t yet played out as the market rallied.

Global equities surged in the first six months of the year, shrugging off recession warnings in the world’s biggest economy as earnings held up and investors bet on a softening in the Federal Reserve’s policy stance. The MSCI World Index posted its best first-half since 2019 with an advance of nearly 14%.

But there are mounting signs the gains can’t last. A Citigroup Inc. index shows downgrades to profit estimates are outnumbering upgrades again, while analysts are projecting a sharper decline in earnings for the full year, according to data compiled by Bloomberg Intelligence. Money managers increasingly warn that chasing the equity rally from here could be a risky move.

With the CBOE Volatility Index — known as Wall Street’s fear gauge — near a record low and investor positioning improving, “there is no more safety net,” says JPMorgan’s Matejka. “FOMO is in full swing.” 

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