While Wall Street is on the edge of its seat ahead of Nvidia’s (NVDA) fourth quarter earnings print tomorrow, Truist co-Chief Investment Officer and chief market strategist Keith Lerner has downgraded equities (^DJI, ^IXIC, ^GSPC) from Attractive to Neutral.
"When we look at the weight of the evidence and our work, they suggest a more mixed backdrop and we’re making that adjustment to reflect that," Lerner explains to Julie Hyman and Josh Lipton, detailing "a soft patch" that’s forming in recent economic data. Lerner also downgraded small-cap stocks (^RUT) from Neutral to Less Attractive.
"What we’ve noticed over the last month now forward earnings estimates for the S&P 500 have started to flatline. Again, that’s not catastrophic. But it is a shift in that trend," Lerner says. "And then thirdly, when we look at the technical side of the market, the price trends, what you see is a very split market — only about 50 to 60% of stocks are actually in uptrends defined by above the 50 or 200 day moving average."
Watch the video above to hear Truist’s Keith Lerner explain how retail investors should interpret a neutral rating.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here: https://finance.yahoo.com/videos/series/market-domination/
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