Citi strategist warns of a 10% September plunge — why he could be right

MoneyWise2021-08-27

Wall Street experts are starting to worry about the surging stock market. While investing is as easy these days as using a smartphone app, the market’s record-high hitting price action is prompting ...

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Comments

LPN
2021-08-27
LPN
Like
Jenjorjack
2021-08-27
Jenjorjack
10% seems a little too little imho please like comment and follow
ARIESan
2021-08-27
ARIESan
?
- Jenjorjack:
  Please hElp me like thanks
IZLIN
2021-08-27
IZLIN
@Meow17 @simplydkam @Sagi08for a read
- Meow17:
  Ok
YauDK
2021-08-27
YauDK
Oh ye ye pls like and comment
- rachhy:
  ya can
hello369
2021-08-27
hello369
Please like
- rachhy:
  ok
- YauDK:
  Oh ye ye

Leave a comment

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But now, he’s predicting an imminent fall. If he’s right, investors are sure to feel some pain in the coming months.\nAnd if some act fast, there could be plenty of opportunities as well.\nWhat Citigroup is warning about\nLevkovich has been warning about a correction for months now.\n“Hitting new highs, leading to new highs means markets never correct, which doesn’t quite make sense,” Levkovich told the hosts of CNBC’s Closing Bell in June.\nThat same month, Levkovich wrote a note to Citi clients expressing that the company would be maintaining its cautious view over the short term.\nIn the letter, he adamantly stuck to his year-end target of 4,000 for the S&P 500, which was 5% below the index’s level at the time. At current levels, that target represents downside of up to 10%.\nAnd he’s not the only one worrying about the future. Just a few months before that note, Suze Orman was predicting a slide, too.\nBut now, Levkovich is anticipating the correction could come as soon as September.\nLevkovich is worried about four factors in particular\nWhat’s got Levkovich so concerned about the market’s near future?\nThere are four factors at play, he says: the Federal Reserve’s discussion on tapering, rising inflation, pressure on profit margins and corporate tax hikes.\nThe Fed’s impact\nThe Fed has been purchasing Treasury securities and mortgage-backed securities rapidly at about $80 billion per month and $40 billion per month, respectively.\nIt said back in June that it would continue that practice until “substantial further progress” had been made toward the Fed’s employment and price stability goals.\nSome analysts are anticipating that may happen sooner than later.\nThis worries Levkovich because a significant part of the S&P 500’s move back to record highs is due to the Fed’s easy-money policies and abundance of capital flooding the market.\nThe Fed had previously committed to keeping interest rates close to 0% until March 2024, but with the threat of inflation rising higher than previously anticipated, observers are now preparing for as many as two rate hikes in 2023.\nCorporate margins narrowing\nPresident Joe Biden has proposed raising the corporate tax rate from 21% to 28%, which opponents worry could disrupt the country’s fragile economic recovery and a big cut to earnings — as much as 13% according to some estimates.\nWhile evidence suggests that corporate tax increases have been far from disastrous to U.S. stock performance historically, profits will certainly be constrained.\nFinally, companies are facing even narrower margins these days as consumer prices continue to bump up against 13-year highs. And as legendary investor Warren Buffett once said, “Inflation acts as a gigantic corporate tapeworm.”\nHow investors should use this information\nThe combination of those four risk factors has Levkovich calling for a double-digit slide stock market slide in the coming weeks.\nThat being said, he adds that not every industry will be as impacted by a downturn.\nInvestors can’t afford to be complacent about their stock choices. When deciding between an asset that promises value or growth, Levkovich suggests investors should prioritize value.\nIt’s a strategy that the “Oracle of Omaha” Warren Buffett relies on even in a bull market.\nAnd while Levkovich does anticipate growth will see a resurgence later this year, he’s not entirely sold on it as a well-rounded long-term investing strategy.\n“If you think of the last decade or so, you’ve had growth outperforming value tremendously so investors are conditioned to buy growth,” Levkovich told the Closing Bell in July. “And as a result, one of the things I worry about is the idea that value is kind of a dalliance, it’s a fling, and then they go back to their true love: growth.”\nPicking investments to ride out the ups and downs\nAll this means is that a red-hot stock market has made it easy for investors — until now.\nGoing forward, you’ll have to be more intentional about where you invest.\nBorrowing Buffett’s strategy, look for companies that offer clear value, regardless of the state of the economy.\nOne asset Bill Gates is partial to is investing in farmland. Over the years, agriculture has even been shown to perform better than stocks and real estate.\nLevkovich has warned that while the overall index may take a hit, individual stock pickers can still do well. But individual stocks can get expensive. With the help of a popular investing app, you can buy fractional shares of big-name stocks to get a slice of their profits.\nThis article provides information only and should not be construed as advice. It is provided without warranty of any kind.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":819922276,"gmtCreate":1630028860495,"gmtModify":1676530204109,"author":{"id":"3578563881684908","authorId":"3578563881684908","name":"LPN","avatar":"https://static.tigerbbs.com/63e3cb5f66016a665aadbe18eaadb09b","vip":1,"crmLevel":1,"crmLevelSwitch":0},"htmlText":"Like","listText":"Like","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/819922276","repostId":2162601358,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":819982936,"gmtCreate":1630027605525,"gmtModify":1676530203546,"author":{"id":"3554873215379647","authorId":"3554873215379647","name":"Jenjorjack","avatar":"https://static.tigerbbs.com/d9d4687aa5519f0d2fb1b18f916be861","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":5,"crmLevelSwitch":1},"htmlText":"10% seems a little too little imho please like comment and follow&nbsp;","listText":"10% seems a little too little imho please like comment and follow&nbsp;","text":"10% seems a little too little imho please like comment and follow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/819982936","repostId":2162601358,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":819989295,"gmtCreate":1630027312217,"gmtModify":1676530203446,"author":{"id":"4087545408973980","authorId":"4087545408973980","name":"ARIESan","avatar":"https://static.tigerbbs.com/ab7b9364a4791173d66fbb5fda8ef925","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"?","listText":"?","text":"?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/819989295","repostId":2162601358,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5661862,"gmtCreate":1630027624745,"gmtModify":1663232970546,"authorId":3554873215379647,"author":{"id":3554873215379647,"authorId":3554873215379647,"name":"Jenjorjack","avatar":"https://static.tigerbbs.com/d9d4687aa5519f0d2fb1b18f916be861","vip":1,"currentWearingBadge":{"badgeId":"44212b71d0be4ec88898348dbe882e03-1","templateUuid":"44212b71d0be4ec88898348dbe882e03","name":"Boss 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thanks"}],"langContent":"EN"},{"id":819935480,"gmtCreate":1630026581740,"gmtModify":1676530203046,"author":{"id":"3581848609787274","authorId":"3581848609787274","name":"IZLIN","avatar":"https://static.tigerbbs.com/f2241963762942310c858a3aae49c0d1","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":1},"htmlText":"<a href=\"https://laohu8.com/U/3581561113691319\">@Meow17</a><a href=\"https://laohu8.com/U/3582502706085184\">@simplydkam</a><a href=\"https://laohu8.com/U/3582026494482473\">@Sagi08</a>for a read","listText":"<a href=\"https://laohu8.com/U/3581561113691319\">@Meow17</a><a href=\"https://laohu8.com/U/3582502706085184\">@simplydkam</a><a href=\"https://laohu8.com/U/3582026494482473\">@Sagi08</a>for a read","text":"@Meow17@simplydkam@Sagi08for a read","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/819935480","repostId":2162601358,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5671758,"gmtCreate":1630111260693,"gmtModify":1663233013427,"authorId":3581561113691319,"author":{"id":3581561113691319,"authorId":3581561113691319,"name":"Meow17","avatar":"https://static.tigerbbs.com/eb44c855c6634e62b2e1d492bb4bcee1","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":819935480,"type":1,"supId":0,"prevId":0,"content":"<u>Ok</u>","text":"<u>Ok</u>","html":"<u>Ok</u>"}],"langContent":"EN"},{"id":819936527,"gmtCreate":1630026485869,"gmtModify":1676530202990,"author":{"id":"3580072870029753","authorId":"3580072870029753","name":"YauDK","avatar":"https://static.tigerbbs.com/4e00c10df4000c04392220903422d15f","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Oh ye ye pls like and comment&nbsp;","listText":"Oh ye ye pls like and comment&nbsp;","text":"Oh ye ye pls like and comment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/819936527","repostId":2162601358,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5661664,"gmtCreate":1630026515596,"gmtModify":1663232968469,"authorId":3569563989023705,"author":{"id":3569563989023705,"authorId":3569563989023705,"name":"rachhy","avatar":"https://community-static.tradeup.com/news/987b013132c46b8f60047c8f8cc9a066","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":819936527,"type":1,"supId":0,"prevId":0,"content":"ya <u>can</u>","text":"ya <u>can</u>","html":"ya <u>can</u>"}],"langContent":"EN"},{"id":819938605,"gmtCreate":1630026428607,"gmtModify":1676530202966,"author":{"id":"3581346389720502","authorId":"3581346389720502","name":"hello369","avatar":"https://static.tigerbbs.com/6f472aef15b4385af1feba4d7bd16e06","vip":1,"hat":"https://static.tigerbbs.com/d54f48232ec41d764838ad8d7c381060","crmLevel":1,"crmLevelSwitch":0},"htmlText":"Please like&nbsp;","listText":"Please like&nbsp;","text":"Please 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