Hello dear readers,
As we navigate the constantly changing stock market, Evercore ISI’s Julian Emanuel has some insights to offer. According to him, Nvidia’s impressive growth is sparking what he refers to as a “fear of missing out” in the market. This phenomenon is leading many investors to become more worried about being underinvested, rather than overexposed. In fact, Emanuel reports that this is the first time such concerns have arisen since 2021.
In a recent note to clients, Emanuel drew parallels between the current market momentum and the Y2K era. He noted that excitement around artificial intelligence and the belief that the U.S. will avoid a recession are major driving forces behind the current bullish sentiment.
However, Emanuel also issued a word of caution, suggesting that it might be time for investors to focus more on risk rather than reward until the market cools off a bit. This comes as the Dow closed at an all-time high on Monday, and the Nasdaq Composite is up 6% year-to-date, hovering near its record high. Meanwhile, Nvidia, the global leader in artificial intelligence chips, has seen a 46% increase in its stock price so far this year, and a whopping 240% surge over the past year.
Emanuel believes that a 13% pullback in stock prices would be normal during a non-recession period, and has advised investors to consider lightening up their positions if they cannot envision themselves as buyers at that level. However, he did note that he has not completely disregarded the potential for growth in certain sectors. In his own words, “We have been on board in pieces. We like communication services. It’s been a great sector. We think there are defensive properties.”
In addition to communication services, Emanuel’s top picks include consumer staples, healthcare, and money markets. He also emphasized the positive aspect of cash investment by stating, “At the end of the day, you’re still making 5% on cash.”
Looking ahead, Emanuel has a year-end target of 4,750 for the S&P 500, implying a roughly 5% loss from Monday’s close.
As always, it’s important to keep in mind that the stock market is subject to inherent risks, and it’s crucial to make informed decisions based on your financial situation and investment goals.
If you’re interested in learning more, I encourage you to read Emanuel’s full interview on CNBC’s “Fast Money”, and be sure to check out our disclaimer for additional information.
Thank you for being a part of our community, and we wish you continued success in your investing journey.
Warm regards,
[Your Name]
[Magazine Editor]
Source link