‘Unadulterated performance chase’ toward record highs is coming: BTIG

Long-time bull Julian Emanuel names one major factor standing in the way of new market highs: Brexit.

But according to Emanuel, it’s a temporary roadblock and a resolution is coming.

“We really need to see is a little bit more clarity on Brexit, and most importantly, that feed-through to European interest rates,” BTIG’s chief equity and derivatives strategist said Monday on CNBC’s “Trading Nation.” “The one thing that’s bothering investors right now is the message on why longer-term bond yields are so low — the implication being that it’s a growth-challenged world.”

Emanuel predicts that once a deal is made, banks will likely lead the next leg of the S&P 500 rally because they typically benefit from higher yields.

With the sector already under-owned, under-loved and under a lot of stress in Europe, he sees financials as poised for a breakout that would ultimately create excitement among investors.

“That could really be the start of a bigger, broader, what we would call, an unadulterated performance chase towards all-time highs,” Emanuel said.

The S&P is already having its best start to a year since “Three Men and a Baby” topped the box office, 1987. It also was the year of the October Black Monday crash. However, Emanuel is confident that epic financial disaster won’t recur in 2019.

“All the work that we’ve done shows that when you have a sell-off of that nature [December 2018] and a rebound like you’ve had thus far this year, the tendency is for further upside,” Emanuel said.

Emanuel has a 3,000 year-end target on the S&P 500 — a 6 percent gain from current levels.

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