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Tag: Health Care Select Sector SPDR Fund

  • Wells Fargo unveils 2024 target, warns of ‘really, really sloppy’ first half for stocks

    Wells Fargo unveils 2024 target, warns of ‘really, really sloppy’ first half for stocks

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    Wells Fargo Securities is officially out with its 2024 stock market forecast.

    Chris Harvey, the firm’s head of equity strategy, sees a volatile path to his S&P 500 to 4,625 year-end target.

    “It’s really hard to get excited. If we have better [economic] growth, then the Fed doesn’t do anything,” he told CNBC’s “Fast Money” on Monday. “If we have worse growth, then numbers are going to come down and then the Fed will eventually cut. The second half will be better, but the first half is going to be really, really sloppy.”

    Harvey’s target is just 75 points above Monday’s S&P 500’s close.

    “Can we go higher from here? Sure, we can go a little bit higher. But I just don’t think you can go a ton higher,” he said. “People have talked about 5,000. I don’t see how you get to that level.”

    In his official 2024 outlook note, Harvey told clients to brace for a “trader’s market” instead of a “buy-and-hold situation.” His early year strategy: Start with a risk-averse stance.

    “The VIX [CBOE Volatility Index] is up 13. Every time we’ve gone into a new year with the VIX at 13, we’ve seen spikes. We’ve seen the equity market pull back, and it’s just not a great setup into 2024,” Harvey added.

    He warns the higher cost of capital is an additional market problem because it prevents multiples from going higher.

    “As long as the cost of capital stays higher, it’s really hard for me to get to a much higher price target,” Harvey said.

    Yet, he still sees opportunities for investors.

    “What we want to do is we want to go to the places that are oversold. We just upgraded utilities today. We upgraded health care,” Harvey noted. “Those are areas that have good valuations, decent fundamentals and most people really aren’t there at this point.”

    ‘I hate to say that as being head of equity strategy’

    Harvey also sees Treasurys as an option.

    “If you look at the alternatives, there are things that are pretty attractive. And, I hate to say that as being head of equity strategy, but you can park money at the front of the curve and make a pretty good rate of return and not put on a whole lot of risk,” said Harvey.

    His 2023 S&P target is 4,420 — which implies a three percent drop from Monday’s close.

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  • Morgan Stanley says stock picking will matter more in coming weeks so buy these quality stocks

    Morgan Stanley says stock picking will matter more in coming weeks so buy these quality stocks

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  • A.I. trade is leaving investors vulnerable to painful losses: Evercore

    A.I. trade is leaving investors vulnerable to painful losses: Evercore

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    The artificial intelligence trade may be leaving investors vulnerable to significant losses.

    Evercore ISI’s Julian Emanuel warns Big Tech concentration in the S&P 500 is at extreme levels.

    “The AI revolution is likely quite real, quite significant. But… these things unfold in waves. And, you get a little too much enthusiasm and the stocks sell off,” the firm’s senior managing director told CNBC’s “Fast Money” on Monday.

    In a research note out this week, Emanuel listed Microsoft, Apple, Amazon, Nvidia and Alphabet as concerns due to clustering in the names.

    “Two-thirds [of the S&P 500 are] driven by those top five names,” he told host Melissa Lee. “The public continues to be disproportionately exposed.”

    Emanuel reflected on “odd conversations” he had over the past several days with people viewing Big Tech stocks as hiding places.

    “[They] actually look at T-bills and wonder whether they’re safe. [They] look at bank deposits over $250,000 and wonder whether they’re safe and are putting money into the top five large-cap tech names,” said Emanuel. “It’s extraordinary.”

    It’s particularly concerning because the bullish activity comes as small caps are getting slammed, according to Emanuel. The Russell 2000, which has exposure to regional bank pressures, is trading closer to the October low.

    For protection against losses, Emanuel is overweight cash. He finds yields at 5% attractive and plans to put the money to work during the next market downturn. Emanuel believes it will be sparked by debt ceiling chaos and a troubled economy over the next few months.

    “You want to stay in the more defensive sectors. Interestingly enough with all of this AI talk, health care and consumer staples have outperformed since April 1,” Emanuel said. “They’re going to continue outperforming.”

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