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FinanceMarket is melting up to new records, but 2022 looks rough: Wells...

Market is melting up to new records, but 2022 looks rough: Wells Fargo

Chris Harvey’s reign because the 12 months’s largest bull will not lengthen into subsequent 12 months.

The Wells Fargo Securities head of fairness technique, whose 2021 S&P 500 goal is 4,825, predicts Wall Street will stage a vibrant year-end rally after which see a dropping 2022.

“You’re going to bring equities to a level that they can’t sustain. We’ll have the equity market melt-up,” he instructed CNBC’s “Trading Nation” on Friday. “We’ll bring stocks to a level where the fundamentals and valuations don’t support them.”

The S&P 500, Nasdaq and Dow ended the week in file territory. The S&P and Nasdaq had been up 7% in October whereas the Dow gained 6%.

“What we’re seeing from a lot of individuals and investors is they feel like the market is unbreakable at this point in time. We’ve had several pullbacks. You’ve bent it, but you’ve never broken,” stated Harvey. “That brings another level of FOMO [fear of missing out], and that brings in a level of confidence.”

Harvey lists robust financial fundamentals, better-than-expected earnings, low capital prices and big money on the sidelines as gasoline for beneficial properties.

“It’s late in the bull market,” he stated. “Now is a period where irrationality becomes much more rational. Things you don’t expect to happen can happen, and most likely will.”

Harvey contends momentum names, which embody banks, can be main drivers into year-end. He calls financials a “stealth leadership play” that may get traction from the Federal Reserve’s taper plans.

Don’t go backside fishing


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