BTIG’s Julian Emanuel warns investors: get ready for a 15-20% pullback.
Emanuel, who entered in 2020 as one of Wall Street’s largest bulls, believes that the stock market does not match the economy with rising risks.
“It is probably time for the market to rethink the uncertainties for the economy,” said CNBC’s chief merchant strategist in an interview with the Trade Nation on Monday. “The social unrest of the last few days only adds to this menu of uncertainty.”
In addition to protests breaking out in cities across America, Emanuel lists the coronavirus pandemic and economic constraints, renewed trade disagreements with China, and the November presidential election as serious short-term obstacles.
“The environment has become more unstable,” he added. “The risk has clearly increased.”
Emanuel breaks through small caps as the most vulnerable group in the market.
“They had an absolutely huge run,” he said. “We just come up with 50% [from the low] obviously, given the risks, especially the fact that the government is putting off the next round of incentives that we consider necessary. “
He believes that the background creates the basis for a summer recession for small caps and the market as a whole.
Despite Emanuel’s cautious tone, he predicts that the year 2021 will be radically different.
“We believe that you are falling and starting to advance at the beginning of next year, probably the economy will have enough time to find support, so that there will be success in medicine, and we can anticipate new historical highs at some point in 2021. No doubt, “said Emanuel.
On Monday, the S & P 500 closed at 3,055.73, which is 39% higher than the low of March 23. The index lost 11% from its all-time high in February.