Runaway commodity prices, diverging global central bank policy and the recent stock market selloff have created a unique buying opportunity for growth and value stocks, according to JPMorgan Chase & Co.’s strategist Marko Kolanovic.

“Both sentiment and positioning are now too bearish,” Kolanovic and Bram Kaplan wrote in a note Tuesday. They anticipate that a near-term rally is likely, particularly in small-cap and high-beta stocks, and suggests that investors construct a “barbell portfolio” of growth stocks including tech, biotech and innovation, alongside value stocks like metals and mining.

“This is rarely the case and currently possible due to a specific confluence of macro factors such as the commodity supercycle, divergent monetary policy, and very large selloff in high-beta and growth stocks (domestic and international) in the first quarter,” the strategists wrote in a note to clients. “There are growth stocks that sold off sufficiently, and there are value stocks that are now also growth.”

On that last point, Kolanovic and Kaplan point to energy and metals and mining as sectors that have been considered value stocks for the past decade, in addition to stocks that are cheap based on measures such as earnings or book value. These can still be viewed as value stocks on their fundamentals, but now they can also be considered growth stocks as their “momentum and quality has improved significantly.”

At the same time, many international and domestic growth stocks have sold off so much in recent months that they are starting to show value attributes. For instance, Chinese technology stocks and ADRs, many of which trade at all-time low multiples, rank high on both value and growth factors, according to the bank. As borrowing costs rise in the U.S., China is easing monetary policy, which should represent a tailwind, Kolanovic and Kaplan wrote.

The strategists are sticking with a pro-risk stance, which runs counter to Morgan Stanley’s Michael Wilson, who warned that the S&P 500 appears to be too sanguine about the economic outlook. JPMorgan’s team disagrees, saying that interest rate hikes are “now priced in” and decades-high inflation will begin to ease.

“The war in Eastern Europe, however, may last longer and its impact on the commodities supercycle will persist for the rest of this year,” Kolanovic and Kaplan added.

This article was provided by Bloomberg News.