New year, new predictions. With 2020 off to the races, projections from strategists across Wall Street are now set in stone. Will market leadership change? Will a correction materialize over the next few months? What are the biggest risks? To give his view, Chris Harvey, the head of equity strategy at Wells Fargo Securities, joins the "What Goes Up" podcast. Some highlights are below.
On the possibility of a first-half correction: "Here, typically when people are a little bit more, what would we say, greedy, as opposed to fearful, it’s not always a great time. So with expectations so much higher, we’re just worried that things can change and change rather quickly.’’
On the outlook for U.S.-China trade: "We’re not 100% certain what Phase 1 actually is. Our view on Phase 2 is you’re not going to see a Phase 2 anytime soon. So we will get a lot of bumps, and we will get a lot of fits and starts with regards to it.’’
On bank stocks: "We upgraded banks in September of 2019. A lot of people said, ‘Hey Chris, we like a lot of your calls. But this, you want to rethink this.’ But the pushback at that point in time was, ‘Chris, credit costs are going to go up. Chris, you really don’t understand anything about net-interest-margins or the curve, it’s just going to be horrific. And what I said was, ‘You’re really not appreciating what’s changed, how the fundamentals have changed, how lower risk, how much more diversified they are.’ And then we got third quarter numbers and everyone’s like, ‘Ooh, maybe you were right.’ And so now the run-up that we’ve seen has been very aggressive. And we do like banks. We like them strategically, longer-term.’’
Running time 23:17