Be careful with investors that accumulate in stocks and hope for a higher constant routine, says the strategist

Ready or not, here comes the earnings season.

Wall Street anticipates a 2% year-on-year decrease in S&P 500 earnings in the fourth quarter, compared to the 2.5% gain forecast at the beginning of that quarter, according to FactSet estimates. However, finances are expected to be a bright spot in that mix, and JPMorgan Chase started it with some optimistic results on Tuesday.

The week began with new records of shares and commercial hopes, so there is no pressure, right?

Our call of the dayMark Luschini, chief investment strategist at wealth manager Janney Montgomery Scott, warns that there needs to be a lot for the stock this year, and the last thing investors want is an overexcited stampede in this market.

“If we again experience a FOMO environment (fear of getting lost) in which the [S&P] the market soars up to 3,500 and we are at 20 times the anticipated earnings and that history of global recovery does not develop and the dollar strengthens as a result of that ”, then that will damage the earnings landscape and leave vulnerable stocks, he told MarketWatch in an interview.

The S&P 500 is currently trading at 18 times future earnings, which is not unreasonable, he says, but says the shares cannot continue to rise in the absence of a positive development on the earnings front. That is after the “remarkable” performance of 28% last year for the S&P 500 that was mainly due to an increase in price rather than a steady growth in earnings, he says.

“Certainly, I would prefer a higher routine that would allow the fundamentals to continue to grow in a way that is compassionate with the increase in share prices, one is validating the other,” Luschini said. And that is how politics and trade issues are expected to remain a focus this year.

“Anything can happen. There are things that can undermine this economy or at least the stock market for which I would be a little prepared, at least not to assume that making money in 2020 will be as easy as in 2019,” he said. .

Read: The merchant revisits Ray Dalio’s ridiculous cash call and warns of a similar fall

The market


DJIA + 0.20%

, S&P

SPX -0.12%

and Nasdaq

COMP, -0.20%

They are mixed while European stocks

SXXP + 0.21%

Asian and troubled markets

ADOW, + 0.39%

mixed finish.

The graphic

The exposure of investors to equities is growing, as shown by our Deutsche Bank chart, which says that the positioning is now at the 96th percentile.

“The positioning of equities, like the market itself, has come a long way ahead of current growth, as investors value the rebound in global growth,” said a recent note by chief strategist Binky Chadha and a bank team.

The buzz

JPMorgan Chase

JPM, + 2.11%

reported earnings and income above forecasts, and shares rose, along with Citigroup

C, + 2.10%

, which also made investors happy with the results. Wells Fargo

WFC -4.05%

It is falling after earnings disappointment. Delta Airlines

DAL + 4.02%

It is also rising in optimistic results.


V, + 0.19%

It will pay $ 5.3 billion for the new Plaid technology, which allows users to link bank accounts to mobile applications.

Climate change is about to reshape finances, says BlackRock

BLK -0.81%

founder Larry Fink, who announced movements to put sustainability “at the center of our investment approach.”

Sentiment of the small business It fell in December, while consumer prices rose at the fastest pace in eight years.

Random readings

Live bullets, tear gas used by Iranian security as Protests grow over fallen Ukrainian plane

Democratic presidential candidates Elizabeth Warren and Bernie Sanders in gender slugfest

Oldest material on earth discovered in a meteorite

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