It may be a good time to lock in market gains for the year.
Credit Suisse’s Jonathan Golub believes the latest all-time highs will run into trouble this month.
“If you’re somebody who just came into a boatload of money … perhaps [wait] until after inauguration,” the firm’s chief U.S. equity strategist told CNBC’s “Trading Nation” on Tuesday.
Right now, Golub is most concerned about the impact of rising coronavirus cases and new lockdowns.
“They’re a reasonably decent headwind for things like Christmas sales, which are really important,” he said. “Also, we’re starting to see on the back of this a bit of a pickup in unemployment claims.”
By January, Golub expects the U.S. will have a better grip on the pandemic as vaccines become available. Plus, he speculates the Street will get more clarity on policy when President-elect Joe Biden takes office. The developments, according to Golub, will set the stage for a strong market run.
“The end of ’21, what are we seeing?” said Golub. “The virus is gone. Enough people in the U.S. and elsewhere will have been vaccinated. We’re not going to be walking around with masks the same way.”
His S&P 500 target for 2021 is 4,050 — which implies a 10% gain from the all-time high hit Tuesday. He also suggests the tech-heavy Nasdaq will continue breaking records next year on the notion the rotation into value stocks isn’t sustainable. Golub’s reason: The world has already seen the bounce off the bottom.
“I’m not feeling the love for this value trade that many are,” Golub said. “We’ll be back to seeing growth stocks leading again. Interest rates will be a little higher, which will mean of the cyclical parts of the market financials should do better than industrials and materials and energy.”