Bull market has legs into year-end and beyond, strategist says. Her top picks for 2022

Bull market has legs into year-end and beyond, strategist says. Her top picks for 2022 (via @TradingNation)

Personal İnvesting, Stock Markets

12/6/2021 2:08:00 AM

Bull market has legs into year-end and beyond, strategist says. Her top picks for 2022 (via TradingNation)

A year-end market rally could still materialize with downside expectations mostly baked into stock prices, Edward Jones's Mona Mahajan says.

response to inflation.However, the downside scenarios for the market's two biggest walls of worry — the path of the coronavirus and the path of the Fed — are starting to get priced in, Mahajan told CNBC's"Trading Nation"on Friday."There is more of a chance for an upside surprise versus downside surprise," said Mahajan, Edward Jones's senior investment strategist. "There is still a chance that we get the year-end rally, especially as investors start to look towards 2022."

Relatively strong consumer spending, higher balance sheet savings rates, strong corporate earnings growth in the U.S. and a rosy 2022 economic growth outlook all play into Mahajan's bull case."We still think markets can move forward, can move higher, perhaps not as high as we saw in the last three years, but in line with earnings growth and perhaps [with] a little bit more volatility," she said.

"Overall, the bull market still has some legs to go."As for the Fed, Mahajan expected it to officially accelerate itstapering programat the upcoming December meeting, finish the effort by March of 2022, then pause and reassess inflation and labor trends before proceeding to interest rate hikes. headtopics.com

"We do think overall, inflation remains elevated, but we think we're heading towards a peak level sometime in the next few months. We do think inflation will come down, but just still remain above the Fed's 2% target," she said.In the meantime, long-term investors shouldn't let market volatility derail their strategies, but should still take account of their portfolio diversification, Mahajan said.

"In the U.S., we see another kind of leg again for the value cyclical trade" if reopening trends re-emerge in the first half of 2022, she said, pointing to financials and industrials as her top picks in the group.Defensive trades such as consumer staples, health care and utilities stocks could also play catch-up over time because of the underlying companies' ability to pass prices onto consumers, she said.

"Beyond the U.S., I think it is an interesting time to think about complimenting your U.S. portfolio, which has probably done quite well over the last three years, with some non-U.S. exposure," Mahajan added.

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TradingNation Typical when we are headed South.😎 TradingNation Propaganda TradingNation LOL says the “strategist” who is personally long and has put every customer fully long. Ridiculous that CNBC keeps on interviewing all these bulls. What else do you expect them to say CNBC has been biggest stock market cheerleader as we all know.

TradingNation Everyone has mastered lying, even Dr. Fauci, that they misrepresent the facts and people see them as the opposite of what they say 😂

Market history says omicron volatility isn't a reason for investors to sellLast Friday's VIX spike of 54% on the omicron variant emergence has been followed by more big moves in the Dow, but VIX history says the bull market won't end. They’re selling now before the Democrats raise the capital gains taxes to 69%? The market is set for a huge correction and the hedge fund managers are about to short it to cause a panic? It’s the end of the year and people are profit taking. Pick one or all of the above! Use options as shock absorbers on portfolio holdings Really? At what other point in history did 20% of a nation choose to cultivate AND distribute pandemic virus variants, rather than get vaccinated?

Most Popular Music Of 2021: Dua Lipa, Drake Top Billboard’s Year-End ListsI'm a breaking news reporter focusing on arts and entertainment. I previously worked as a features reporter at the New York Post, where I covered pop culture, and at the Boston Globe and Boston.com I graduated from Emerson College in 2017 with a degree in journalism. Follow me on Twitter MarisaDellatto or reach out at mdellattoforbes.com.

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