PNC Financial is tossing cold water on the fourth-quarter rally.
Covid omicron worries will take a heavy toll on danger hungers over the next 2 weeks, according to Chief Investment Officer Amanda Agati.
“We’ve already gotten the Santa rally,” she informed CNBC’s “Trading Nation” onMonday “We’re seeing a little bit of investor fatigue here.”
The significant indexes began the week in the red. The S&P 500 is down 3% over the previous 3 days. It’s the index’s worst three-day slide considering that September.
Meanwhile, the tech-heavy Nasdaq is down practically 4% in the exact same time period.
“In addition to the omicron fears and negative headlines swirling around, I think investors are kind of locking in some of those gains and ready to go on Christmas vacation,” she stated.
Yet, she does not see a much deeper issue.
“We don’t think this is going to lead to a significant market correction,” stated Agati, who kept in mind liquidity is relatively low this time of year.
Agati’s optimism depends upon omicron having less serious consequences than previous Covid-19 pressures. Her longer-term 2022 projection, which came out Monday, is developed on the presumption omicron will not cause hospitalization spikes, financial shutdowns and more supply chain difficulty.
Even though her leading wildcard is Covid, her base case is that 2022 will be a strong year for the marketplace. Plus, she thinks among this year’s greatest losers will stage a significant rebound.
” EM [emerging markets] is extremely well located, however it’s been definitely penalized from the regulative overhangs. What I believe will be intriguing in 2022 is we’ll begin to see a few of that … China regulative background fade,” Agati stated. “That would really be the shot in the arm that emerging markets need to outperform in 2022.”
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