Chris Harvey, the head of equity strategy at Wells Fargo Securities, is warning investors may be overly bullish about in the U.S. stock market in the New Year.
By James DiGeorgia
In an exclusive podcast interview with Bloomberg released today, Chris Harvey, the head of equity strategy at Wells Fargo Securities, admits to a double-edged sword…
“There are a lot of things to like. Rates are lower, credit spreads are tighter, the Fed has been accommodative, we’ve got some sort of resolution with trade and tariff and sentiment has improved greatly… And that’s what we don’t like.”
In other words, the U.S. stock market looks like it could break out in 2020 for another 15% after the longest-running bull market in history. Expectations like this should have every investor worried. Yet, with the volatility index at just over 14 investors appear to have no real worries.
Chris Harvey points out…
“Typically, when people are a little bit more, what would we say, greedy, as opposed to fearful, it’s not always a great time,” (Warren Buffett’s often-cited market mantra should be in the back of every investor’s mind.) “With expectations so much higher, we’re just worried that things can change and change rather quickly.’’
Harvey went on to point to investor paranoia at the beginning of the fourth quarter of 2018 that turned out to be a great time to buy…
“The wheels were falling off the cart; the world was going to end — it was a fantastic time to get involved, you had a great opportunity to invest.”
By contrast, as we enter 2020, investors are starting to act as if Dow Jones 30,000 is right around the corner.