Investors are pricing in a “Trump recession” due to the ongoing and escalating trade war with China, but market-moving JPMorgan strategist Marko Kolanovic says they should instead be preparing for a bounce.

As concerns of a long, brutal trade war weigh, sinking the economy and Wall Street along with it, investors have gotten too defensive, Kolanovic said, fleeing economically sensitive stocks.

With the rotation widening valuation spreads too far, value and high-beta stocks are likely to surge as much as 20% in the event a new trade agreement is reached, according to Bloomberg.

“The U.S. economy is facing a quite unique situation in which one individual can disrupt global trade and investment plans of U.S. corporations, tax consumers on a broad range of imports,” Kolanovic wrote in a note. “Given all of this — why are we not bearish on equities and the economy? Because this situation can also be undone on short notice and many market segments already price in worst-case outcomes.”

After Trump escalated the trade fight in May with a pair of tweets that were enough to scare off investing legends like Stanley Druckenmiller, investors have turned overly cautious, and Kolanovic against reiterated his view that Trump is under far too much pressure to make a deal with China, boosting his chances of reelection in 2020.

The moment a new deal is reached, Kolanovic said the market as a whole should see an immediate 5% bump.

“If there is a trade deal, which would be rational to expect going into election year, we think that about half of the market damage could be quickly reversed,” Kolanovic said. “Low investor positioning and an unprecedented divergence between defensive and value market segments warrant exposure to trade-sensitive and high-beta segments, which are now largely pricing in a recession.”

Trump will meet with his Chinese counterpart, Xi Jinping, at the G-20 summit later this month, where the two sides are expected to talk trade.

Commerce Secretary Wilbur Ross said no one should expect a deal coming out of the summit, but the two sides will hopefully be much closer to an agreement.