As retail investors head for the exits, Evercore ISI's Julian Emanuel wants to put money to work.
He thinks the economy will avoid a recession because of healthy credit markets and continued gains.
The path to higher stock prices is a function of being able to discount the macro news and focus on the fact that you are still going to have high earnings growth.
His S&P 500 year-end target is 4,800, which means a 22% jump from the Tuesday market close. Emanuel believes retail investors were exposed to growth stocks and drove much of the market losses.
The bull case rests on a drying up of the public selling of these stocks.
Emanuel believes retail investors will return to stocks when they see that employment is strong and inflation is peaking. He thinks that will happen later this summer.
Emanuel said that when things turn down, it will be a more benign environment for the equity markets.
His forecast is dependent on the 10-year Treasury Note yield cooling and ending the year at 3%. The yield fell to its lowest level in more than a month.
Emanuel is bullish on health care and thinks it will be good for investors. He is overweight in financials and industrials.
Emanuel said that the shift from growth to value is ongoing.
There is no truth to this.
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