Wells Fargo warns of increased volatility due to selling season, election, and advises strategic investing

From Investing.com: 2024-09-21 05:30:00

Wells Fargo warns investors to brace for increased market volatility with the approaching selling season and U.S. election. Historical data shows market declines in late summer and early fall, a trend likely to continue in 2024. The investment bank advises preparing a “shopping list” for buying opportunities during market dips and trimming overexposed sectors like tech.

The U.S. election, marked by uncertainty and contention, is expected to heighten market volatility in the coming months. Wells Fargo strategists predict bouts of volatility as stocks struggle to reach new highs amid the election cycle. They recommend focusing on sectors like Communication Services, Energy, Financials, Industrials, and Materials, as well as U.S. Small Cap Equities for potential opportunities.

Wells Fargo anticipates a shift to sustained economic growth in 2025 post-election, driven by an earnings recovery and equity price resurgence. The firm remains optimistic about the longer-term outlook beyond 2024, advising investors to keep 2025 in view when making investment decisions in the near term. The bank’s campaign slogan for investors: “Keep an eye on ’25.”

The S&P 500 saw a slight increase in a quiet trading session, contrasted by a decline in the tech-heavy Nasdaq due to tech stock losses. Investors contemplated a potential larger rate cut from the U.S. Federal Reserve later in the week. The S&P technology sector, previously the strongest performer this year among all sectors, saw a substantial 0.95% dip, leading the session’s losses.



Read more at Investing.com: Selling season, election ahead, but keep an eye on ’25, says Wells Fargo By Investing.com