"The biggest risk is the number of cases of the Covid virus spiking once again, because of the cascading effect that it would have on corporate profits and the uncertainty that it would present toward the election in November," Stovall said.
Despite 2020's unprecedented downturn, Stovall says he believes the weaker historical trend will apply this year, too. He contends the market pullback that began on June 8 hasn't ended yet. "We've been stumbling along the way. We had a 7% pullback," he said. "Sometime in the third quarter we end up concluding this correction with a little deeper sell-off."But earnings season may buy investors some time.
According to Stovall, second-quarter earnings estimates are so low, they should beat the Street and serve as a short-term bullish driver. So, July may emerge as a stronger month for the market with August and September seeing the most trouble.successfully recover from the virus fallout and seasonal woes"Twelve months from now I think we're going to be in new high territory," Stovall said.
In a year, Stovall predicts, the S&P 500 will be at 3,435 — a 1% gain from the all-time high hit in February.
TradingNation Not going to happen. In the biggest melt up ever. If you’re not long stocks now, then I feel bad for you. Trump and Powell are the best thing that ever happened. Get long quick and make some money. Up $50 million since March.
TradingNation It won’t happen because of Powell who denied the independence of central bank and becomes the puppet of the rich.