The Dow hitting 30,000 may just be the start, hints investing legend
The Dow hitting 30,000 on Tuesday may just be the start of bullish runs for the major equity indices over the next 12 months, hints Wall Street veteran Byron Wien.
“I hope the retail investor owns what he or she loves. I think that’s critical. And so my view is that since I don’t expect a major correction, and if there is a downturn in the market it’s going to be temporary, I think the retail investor should hang in there with the holdings that he or she feels confident about. I would not be an aggressive seller in this market environment,” Wien told Yahoo Finance Live.
Wien, 87, is vice chairman in the private wealth solutions of Wall Street giant Blackstone Group.
For Wien, his bullish take on the markets reflects a view that the economy and corporate earnings growth will be much improved in 2021 as a COVID-19 vaccine rolls outs globally. That potential occurrence is something that based on the future predictive power assets markets, would need to get priced in today.
Continued Wien, “I think that since March we have had a pretty optimistic attitude within the market and that has been reflected in prices. Prices may be ahead of themselves, but I think the chances of us having a significant correction are pretty small.”
To be sure, optimism remains rampant on Wall Street ahead of the year-end despite the coronavirus pandemic raging on across the country.
Investors sent the Dow Jones Industrial Average above 30,000 on Tuesday for the first time ever, on the back of expectations for a COVID-19 vaccine by year-end and the potential of former dovish Federal Reserve Chief Janet Yellen becoming Biden’s Treasury Secretary.
“It means liquidity, liquidity and liquidity,” managing director and head of U.S. large-cap bank research at Wells Fargo Securities Mike Mayo told Yahoo Finance Live on the market’s read on Yellen as a possible new Treasury secretary. As they say in markets, don’t fight the Fed — and strategists such as Mayo think it may be even harder for the bears to fight a dovish former Fed chair (Yellen) and a dovish current Fed Chair Jerome Powell.
But there is more bullishness in the markets besides the glitzy Dow 30,000 milestone, suggesting a growing risk appetite by a larger swath of investors.
Tesla shares have surged 31% inside of a month following news of its S&P 500 inclusion. Bitcoin is on the verge of blowing by $20,000 after a remarkable one-month rally. And bank stocks — led by more than 15% gains each in Bank of America, JPMorgan and Wells Fargo —have surged in the past month on hopes for an economic improvement due to a vaccine.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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