The WFII team is not the only one who expects a rebound in US stocks. JPMorgan Chase & Co. strategists believe last week that the S & P 500 will recover what was lost in October.
Attention, investors: if you have collected cash, use it now. That's what Wells Fargo & Co. said
The wave of sales that began in October is not the end of the bullish market and investors must continue to resist the urge to overreact to negative headlines, writes Darrell Cronk, president of the bank's Investment Institute (WFII), in his comments. to customers on Tuesday.
"We believe that now is the time to get ready to increase equity exposure in profitable regions, such as middle and high-class US companies and emerging market securities, and support the spread of cash now or even gradually increase positions in the next few days and weeks, "said the strategist, adding that" current conditions have the potential to create some of the best entry points on the stock market since the November 2016 election. "
The collapse of US technology stocks, new signs of stress in the corporate credit market and less optimistic solutions to the Sino-US trade dispute have now renewed sales last month in global stock references. The S & P 500 fell briefly 10% below the September closing on Tuesday before recovering just above the threshold.
The WFII team is not the only one who expects a rebound in US stocks. JPMorgan Chase & Co. strategists believe last week that the S & P 500 will recover what was lost in October. However, other companies such as Goldman Sachs Group Inc. less optimistic and recommend that investors reduce risk and increase their cash position in customer comments on Monday.
Wells Fargo will be worried if the S & P 500 falls below October and first quarter lows, but the US economic outlook remains solid and the Federal Reserve will remain flexible, strategists said. In addition, a sharp decline in the assessment of multiple technology stocks showed that the worst sales might have ended, they added.
"Concerns about slowing global growth are weighing on strong US growth and investor confidence," they said. "The point in our opinion is that an economic recession will not occur, even though many financial market regions calculate prices as if we are targeting one."