This money manager says that stock investors are eagerly waiting for next year

While that optimism may have cost a lot in the market, the rest of the year probably won’t see a large market decline, Thomas H., president and chief executive of Stocks Traders Daily. Key Jr. and a portfolio manager at Equity Logic.

But it is coming in 2021, he tells Marketwatch, we have here Phone of the day.

The big reason is that Kee analysts believe that 2021 earnings per share expectations for the Dow Jones Industrial Average DJIA,
+ 1.59%
Are too many. Those DJIA EPS growth forecasts are hovering at 26%, down from 32% due to the kickdown on a recent Autumn COVID-19 wave. As they come down, as expected, the valuation risk increases, he says.

Stock traders daily

“Assuming that the Dow is right there, and that there is a 32% increase in income for the Dow in 2021. At the end of 2021, income in excess of the value for DJIA will be higher than at any other point since the credit crisis. , Which means it will be very expensive, “he says. The market may see a 25% drop in those circumstances, he says.

“By the end of next year, you’re going to see physical deficiencies in the market, even though everything’s going to be normal,” COVID-19, Kee says. “When it arrives, it is a surprise to most investors who expect to look very good next year. The truth is that this year should be worse, and it is not, because there is so much excitement. “

By next year, investors will be working largely with economic digs and central banks that are reducing stimulus (early to mid-year).

But he says that Wall Street bankers will keep the market current this year to ensure that the bonuses that come to its end are weakened.

As for how to play out this impending decline in stocks, Kei is sticking to the strategy recommended for this column in May – the S&P 500 ETF rotating among SPYs.
+ 1.24%
And cash. Keep saying, he says, until you see the signal that investors are picking up in the overvalued market.

Action in the stock market matters the most. “I’m looking for reversal signs and they come in all kinds of different shapes and sizes,” he says. One possible sign: Markets break above a large level of resistance and then reverse back down. It is one of many, Kei says.


Dow YM00,
And S&P 500 futures ES00,
Are below, while the Nasdaq NQ00 futures,
+ 0.25%
Are crawling European Stock SXXP,
Are less. Nikkei Nik,
+ 0.41%
000300 000 shares in China, while briefly hit a 29-year high
slipped. Pounds GBPUSD,
+ 0.40%
Next week is on report of a possible EU / UK trade deal.

Read: This is how bad commercial real estate pain can be for banks and other lenders

The buzz

Tesla TSLA,
The stock is up 12% on the news that the electric carmaker will join the S&P 500 next month. And global online-rental marketplace Airbnb announced an initial public offering of $ 1 billion.

E-commerce retailer Amazon AMZN,
+ 0.07%
Has launched an online pharmacy store, which includes discounts for Prime members.

Home-Improvement Group Home Depot HD,
+ 0.86%
Reported better-than-expected earnings and revenue. Walmart WMT shares,
+ 1.26%
Tops earnings after retailer. Kohl’s earnings from KSS,
+ 7.79%
Still to come

Retail sales and import prices are ahead, followed by industrial production, trade inventories and a home builders index. Richard Clarida, vice chairman of the Federal Reserve, said late on Monday that the economy would need further monetary and fiscal support.

Georgia’s Secretary of State told the Washington Post that top Republicans, including Sen. Lindsey Graham, are pressuring them to bounce legal non-spot presidential ballots. Meanwhile, the state’s vote recount so far has 2,600 uncounted ballots, mostly for President Donald Trump.

A few days after Hurricane Iota Eta spread to Central America.

Chief Executive Officer of Take-Two Interactive TTWO,
+ 0.34%
More on the next generation of videogaming and Barone’s Investing at Tech on Thursday at 1pm.

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