This growing political risk may hurt stocks (via TradingNation)
Wells Fargo Securities' Christopher Harvey believes the market is underestimating a major risk — and it's not the coronavirus.
According to the firm's head of equity strategy, a Joe Biden presidential win could throw Wall Street a curve ball and hurt the recovery.Trading NationThe concern: A Biden win could result in changes to the tax code which would be a negative for stocks.," noted Harvey.
His warning comes as investors try to gauge risks from a virus surge in several states. Harvey is watching the infection rate, but"Every day we get new Covid headlines. They're not great, but they're still well within the realm of possibilities of what we expect," said Harvey.year-end price target or 3,388, which reflects about a 13% increase from current levels.
Despite his long-term bull case for stocks, Harvey warns the market is vulnerable to 5% to 10% pullback from current levels. "We've been cautious on the market for a few weeks now," he said. "We've gone a little bit too far, too fast. And, now we just need a healthy correction.", and Harvey is advising investors to use weakness to their advantage.
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