While retail investors look to exits when stock prices fluctuate wildly, Evercore ISI’s Julian Emanuel wants to put his money to work.
He calls the market environment very bad, but he believes the economy will stave off a recession – especially given the healthy credit markets and continued growth.
“The path leading to higher [stock] pricing is really a function of being able to discount the macro news and focus on the fact that you’re still going to have mid-to-high, single-digit earnings growth,” said the executive. The company’s senior executive told CNBC.Quick money“on Tuesday.
His S&P 500 year-end target is 4,800, which is 22% increase since the third market is closed. Emanuel attributes much of the market damage to retail investors’ overexposure to growth stocks, specifically Big technology.
“The bullish case is basically because the public selling of these shares is drying up,” he said.
According to Emanuel, retail investors will return to stocks when they see employment remaining strong and Inflation is at its peak. He hopes that will happen later this summer.
“When things go down, that’s going to be a healthier environment for the stock market,” said Emanuel.
His forecast also depends on the benchmark 10-year Treasury note yield cooled down and ended the year at 3%. On Tuesday, output fell to its lowest level in more than a month.
Emanuel is most optimistic about health care and see solid upside for long-term investors. He is also overweight in finance and industry.
“The shift from growth to value is something that’s happening,” Emanuel said.
