Corona Virus or Corona Vaccine: Fear or Hope - What drives the stock market?
National Securities' Art Hogan sees trouble brewing in the market.
Despite the fact that the significant indexes closed greater on Tuesday, he sees the coronavirus case rise overtaking favorable vaccine news as a market driver-- leading to a 5% to 8% pullback.
" We have a tug of war between virus news and vaccine news the better part of six months, and that's been balanced off by stimulus," the firm's chief market strategist informed CNBC's "Trading Country." "That seems to be behind us, and today I think the virus news takes control of a little bit."
His primary issue is the effect of skyrocketing infection cases, hospitalizations and continued lockdowns.
" We do have to concern a considering how much economic damage takes place," stated Hogan. "I do not think we've priced in the financial damage that will follow in the wake of this, and I believe that's what the marketplace is going to begin to glom onto."
Hogan compares the size and scope of a pullback to September's swoon, a setback be predicted on "Trading Nation" in August. Stocks recovered all-time highs in the 4th quarter.
" I'm not concerned about the near-term drawdown ending up being the start of something bigger," he stated. "2021 is going to be a fantastic year."
On Monday, Hogan released his official 2021 S&P 500 price target of 4,300. It indicates a 14.5% dive from the index's record closing high hit Thursday. His bullish case is built on the notion vaccines will end up being widely available by the spring, and the economy will return to organization.
"We are visiting a surge of financial activity in the back half of this year-- that suppressed demand for items and services that you and I had not had the ability to satisfy because March," said Hogan, who oversees $15 billion in possessions.
As he waits on the marketplace to support, Hogan prepares to rebalance clients' 60/40 portfolios every 2 months.
"If you're a long-term financier, do not let the short-term volatility-- and volatility is going to increase-- shake you out of your long-term investment plans," Hogan said.