A senior strategist from Federated Investors recently explained why the summer months for equities may not have been very sunny and has some clues ready.
Philip Orlando, chief equity strategist and senior vice president of asset manager Federated Investors , points to a “cruel” summer for equities as part of an interview in “CNBC’s Future Now” program .
That’s why it will not be a nice summer for the stock market
Philip Orlando echoed “CNBC” that the stock market is currently in transition to a clear case: “We expect an air hole here that will bring the market in the summer months, for example, on the sliding 200-day line,” so Orlando.
The Dow Jones is currently on a six-day dry spell, and the S & P 500 also has four negative trading days in a row. This current negative move led Orlando, among others, to his opinion, as “CNBC” reports.
But actually, the supposedly upcoming reset will be triggered by, among other things, the North Korea conflict and the interest rate decisions around the Federal Reserve and the ECB, causing headwinds, Orlando said: “Why should investors not take profits?”, The Industry experts in the interview in the room and expects a fluctuation of at least five percent.
No black hole – Fourth quarter is getting stronger
Basically, however, the chief equity strategist does not expect the upcoming hole to swell to a black hole for stocks. On the contrary, with worries over geopolitical and monetary events subsiding, the Federated Chief Strategist expects a “very solid, very strong fourth-quarter rally by the end of the year.” For example, Orlando has set a year-end target of around 3,100 index points for the S & P 500 – at the current price, that would mean a price jump of twelve percent.
Philip Orlando is focusing on small-cap stocks in particular: “We had a lot of demand for small caps,” he says in an interview. He also recommends paying attention to large-cap stocks in the financial, energy and industrial sectors. Because such values could develop positively in an environment in which interest rates are raised, explains the Federated Vice President.