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James Sun
32 minutes ago
Julian Emanuel, Evercore ISI’s head of equity, derivatives, and quantitative strategy, said stocks could trade more like they did in the 1990s when interest rates held more sway over the market. The closely watched 10-year yield is hovering just below 4.5%. A yield much above that level could threaten stocks, strategists say.
“You had episodic events, where the bond market disciplined the equity market and then the equity market just continued on its merry way,” said Emanuel. “That’s a lot of what we see because there’s this uncertainty around what policy is going to look like and frankly what the effect of the policy is going to be.” Trump has many options in how he implements his campaign promises on immigration and tariffs.
Comments last week from Fed chair Jerome Powell have hurt stocks. Powell indicated the Fed may make fewer cuts than investors expected. Emanuel says the stock market could pull back 5% to 9% before continuing its uptrend.
Market uncertainty will lift next year once investors see how Trump intends to proceed, Emanuel said. He expects stocks to have a rapid run up in the first half of the year
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