- Advertisement -Newspaper WordPress Theme
FinanceSanta rally won't restart due to Covid risks, profit-taking, top investor says

Santa rally won’t restart due to Covid risks, profit-taking, top investor says

PNC Financial is throwing chilly water on the fourth-quarter rally.

Covid omicron fears will take a heavy toll on danger appetites over the subsequent two weeks, in accordance to Chief Investment Officer Amanda Agati.

“We’ve already gotten the Santa rally,” she instructed CNBC’s “Trading Nation” on Monday. “We’re seeing a little bit of investor fatigue here.”

The main indexes kicked off the week within the crimson. The S&P 500 is down 3% over the previous three days. It’s the index’s worst three-day slide since September.

Meanwhile, the tech-heavy Nasdaq is down nearly 4% in the identical time span.

“In addition to the omicron fears and negative headlines swirling around, I think investors are kind of locking in some of those gains and ready to go on Christmas vacation,” she mentioned.

Yet, she does not see a deeper downside.

“We don’t think this is going to lead to a significant market correction,” mentioned Agati, who famous liquidity is pretty low this time of yr.

Agati’s optimism hinges on omicron having fewer extreme repercussions than earlier Covid-19 strains. Her longer-term 2022 forecast, which got here out Monday, is constructed on the belief omicron won’t lead to hospitalization spikes, financial shutdowns and extra provide chain hassle.

Even although her top wildcard is Covid, her base case is that 2022 will likely be a powerful yr for the market. Plus, she believes one in all this yr’s largest losers will stage a serious rebound.

“EM [emerging markets] is very well positioned, but it’s been absolutely punished from the regulatory overhangs. What I think will be interesting in 2022 is we’ll start to see some of that… China regulatory backdrop fade,” Agati mentioned. “That would really be the shot in the arm that emerging markets need to outperform in 2022.”

Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Exclusive content

- Advertisement -Newspaper WordPress Theme

Latest article

More article

- Advertisement -Newspaper WordPress Theme