One of Wall Street’s biggest bulls isn’t jumping on the growth stocks bandwagon.
Despite the record highs of the tech-heavy Nasdaq, Credit Suisse’s Jonathan Golub currently prefers value trades.
“The second quarter of this year will be the fastest GDP quarter since 1952. So basically since the Marshall Plan and the rebuilding of Europe after World War II, ”the chief strategist for US equities and head of quantitative research for the company told CNBC. Trading Nation “on Wednesday.” The economy is on fire. “
However, growth, which includes technology, has received an offer as benchmark 10-year government bond yields fell to February lows this week. The yield fell below 1.30% at times on Wednesday.
“If you think things are slowing down more aggressively, then you want to be a growth investor,” said Golub. “They want to rotate back toward technology, and that’s what has happened lately with falling interest rates.”
“Just scream upstairs”
Golub, a long-term tech bull, predicts the value will outperform the group in the next six to 18 months.
“Right now there is so much economic demand. People are going out with money in their pockets that we are seeing scarcity everywhere and that is what is driving inflation up,” said Golub. “This is a backdrop that just screams upwards.”
His top three tips are financial, energy, and consumer discretionary.
“They want to play this with value. There I stand,” he remarked. “We have a little more juice in this lemon.”
His year-end target for the S&P 500 is 4,600 – up 6% from Wednesday’s all-time high. Meanwhile, the Dow is one percent off its all-time high.
“If you look at individuals, they are flooded with cash,” he noted. “It’s a very, very supportive setting.”
Golub admits the market could have “hiccups” by the end of the year. It wouldn’t derail its bull case for stocks, however.
“We know that in a year we will not see this economic growth. It is not sustainable,” said Golub. “We also know that inflation is temporary and won’t be here forever.”
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