Market uncertainty should “peek” at Wednesday’s tariff deadline, according to Evercore ISI.
In this week’s note, Julian Emmanuel wrote that investors should resist tariff anxiety and accumulate stocks.
“What you need is a little less uncertainty,” the company’s senior managing director said on CNBC’s “Fast Money” on Monday.
Emmanuel compares market pessimism with the breakdown of regional banks in March 2023.
“To talk to clients this morning and on weekends and to coworkers is just as negative as I remember going back when Silicon Valley Bank exploded,” he said. “I didn’t know that the Fed would ‘take care of the business.’ ”
Emmanuel’s bull forecast comes when Wall Street closes a negative quarter for key indicators. The S&P 500 and Tech Heavy Nasdaq have seen their worst performance in the quarter since 2022.
Nasdaq is currently 14% below its record high hit in December. But Emmanuel is finding an opportunity.
“We think you’ll generally go back to the previous bull market winners: technology, communication services, and [consumer] Discretionary,” he said.
They were the worst performance sector of the S&P 500 this month and quarter. But at these levels, companies want to buy back stocks that help raise prices, according to Emmanuel.
Meanwhile, he will avoid recent leaders.
“What’s interesting about today is that everyone moved the sector in a direction that basically shows how the entire quarter was going,” Emmanuel said. “We saw consumer staples being outperformed. Healthcare was very strong. In our view, they are probably places where defense is hiding.”
Healthcare rose 6% in the first quarter, with consumer staples increasing by about 5%.
Emmanuel believes the market will regain its footing. His S&P 500 year-end price target is 6,800, meaning a 21% increase since the end of Monday.
“We don’t think you need material clarity,” he said. “It’s necessary… a very, very extreme scenario [tied to tariffs] That’s less likely. ”
CNBC’s Christopher Hayes contributed to this report.
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