The bull run could soon hit turbulence once the record-breaking earnings season ends, according to Nuveen’s Brian Nick.
“We’ll see in November as well as December as Great news headlines go away – what, if anything – takes over as well as what kinds of bumps we get between today as well as the end of the year,” the firm’s chief investment strategist said recently on CNBC’s “Futures today.”
nevertheless Nick, whose firm has over $900 billion in assets under management, notes the item wouldn’t permanently harm the rally.
“If you’re looking forward into the end of next year, the light is usually still green for the U.S. economy as well as for corporate profits,” he added.
“Between today as well as then, we see the markets anywhere between 8 percent as well as 10 percent higher, as well as of which’s basically in-line with our expectations for earnings growth,” the investor said.
A strong earnings season has been one of the main drivers for the fresh market highs. With more than half of S&P 500 Index companies reporting so far, nearly three-fourths of them have exceeded Wall Street estimates, while 17 percent missed as well as 9 percent came in-line.
Since JPMorgan Chase kicked off earnings season on October 12, the S&P 500 as well as Dow have closed at intraday highs six times, while the Nasdaq reached the same milestone 5 times. On Friday, both the Nasdaq as well as S&P closed at brand-new records.
However, Nick points out of which the next couple of months could become bumpy as the markets deal with uncertainty over factors such as tax reform, which is usually currently advancing through Congress.
“I go back as well as forth with how much of of which tax reform package is usually priced in. Part of the problem is usually of which we don’t have a bill, as well as we won’t have one until next week,” said Nick. “There’s about a 50 percent chance of which we do end up with nothing. I think there’s only about a one in three chance of which looks similar to what we have today.”
He said the markets will also need more clarity surrounding the next two Federal Reserve meetings, as well as the potential brand-new leadership there. President Donald Trump is usually supposed to name a replacement to current Fed Chair Janet Yellen, nevertheless has not made a firm decision on who will ascent to the entire world’s most powerful central bank.
Despite the possible near-term headwinds, he’s reiterating his bull case for next year.
“I think we are going to see stronger earnings not only from the U.S. nevertheless abroad, as well as of which’s going to be Great for global equities across the board,” Nick said.