Evercore ISI’s Julian Emanuel wants to raise money to work as retail investors exit due to the sharp rise in stock prices.
He described the market environment as “extremely ugly”, but said he believed the economy would avoid a recession – especially because of a healthy credit market and continued profitability.
“The high way [stock] Prices are actually a function of being able to offer macro news discounts and focus on the fact that you’re still going to get higher, single-digit earnings from the middle, “the firm’s senior managing director told CNBC’s” Fast Money “on Tuesday.
Its S&P 500 year end target is 4,800, which means a 22% jump from Tuesday’s market close. Emanuel claims that most of the market losses were driven by retail investors who were exposed to growth stocks, such as Big Tech.
“The bull case is largely dependent on the drying up of public sales of these stocks,” he said.
According to Emanuel, retail investors will return to the stock when they realize that employment is strong and inflation is high. He hopes that will happen later this summer.
“When things close, it will be a more conducive environment for the equity market,” said Emanuel.
His forecast benchmark 10-year Treasury note yield also cooled and depended on 3% at the end of the year. On Tuesday, yields fell to their lowest level in more than a month.
Emanuel sees a tough rise for healthcare enthusiasts and long-term investors. He also weighs heavily in finance and industry.
“The shift from growth to price is something that is ongoing,” said Emanuel.