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PNC Financial analyst Amanda Agati said that it would be too early to get defensive anytime soon. She added that the market has some more potential left and can give 10-15% modest gains in 2020.
The stock markets had some phenomenal rally last year in 2019 with Dow Jones and S&P 500 indices hitting their all-time highs. However, with markets trading at such high optimism, analysts have started working out whether it’s the right time to cash-in or not.
PNC Financial’s Amanda Agati thinks that selling can be the biggest mistake investors can make right now. Speaking to CNBC, Agati said that the market has a lot more surprises in store. She adds that the market is still not at its peak and there’s a lot more steam left. At CNBC’s Trading Nation, Agati said:
“The worst thing that clients and investors can do with the market at current levels is pull-the-plug and go underweight equities. There’s time left on the clock. We still think there’s room for this market to move higher.”
Dow Jones climbed above 29,000 levels recently after a historic run in 2019. simultaneously, the S&P 500 has shown a similar performance in 2019. Both the indices surged by over 25% in the last year. While several global analysts have been indicating a possible slowdown this year, the PNC Financial analyst remains optimistic. Agati said:
“We actually have a fairly favorable view for 2020. I’d like to see this rally take a little bit of a pause or slow down a little bit just for the fundamentals to catch up. But we actually think 2020 is going to shape up to be a pretty solid year.”
Don’t Get Defensive too Soon
She further stressed that selling can be the “worst thing” an investor can do in 2020. During the Dow Jone crash of Christmas 2018, Agati had advised the investors to hold their stocks and not panic. Well, it turned out that investors hearing her would have really benefitted in 2019.
“It can be very painful to get too defensive too soon,” added Agati. “We’ve had a handful of opportunities to actually do that really since December 2018, and it would have been a mistake.”
Agati also stressed that the first half of 2020 will focus on improving fundamentals and earnings growth. However, she says that the second half could be volatile and uncertain owing to the U.S. Presidential Elections 2020.
Note that Agati explicitly states that she doesn’t expect anything like 2019 returns. Rather she says that we can expect modest returns of 10-15% this year.
On the other hand, there have been calls of impending recession this year in 2020. The U.S. Debt is at an all-time high, Brexit concerns are still hovering around, the European economy seems to be on tenterhooks and multiple other reasons. Simultaneously, we witnessed some rising geopolitical tensions in the middle-east with the U.S. and Iran locking horns.
At the same time, Bitcoin and cryptocurrency markets are expected to perform well in 2020. Several analysts hint that the Bitcoin price will cross its all-time high of $20,000 in 2020 and possibly move even higher.