Despite record highs on the S&P 500 and the Dow, Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas said it’s a great time to enter the equity market.
Wolfberg said technical issues have been overlooked in the Treasury market causing investors to doubt equities can head higher than current levels.
Wolfberg thinks people are looking at the price action in the treasury market incorrectly.
“A lot of times, people look at the treasury market to see the rotation in to bonds and out of equities. I think what we have here is a technical situation, which has caused this buying in the treasury market and leading some to think we’re seeing recessionary price action,” Wolfberg said.
Between what we’ve seen in the Ukraine and the economic slowdown in China, Wolfberg thinks the market has performed well.
“This is a great entry point because you are getting better economic data, you’re getting better non-farm payrolls number, you’re getting a better ISM, you’re starting to see a turn in the housing-related economic data so I think all those factors together are contributing to what I think will be a better second half for the equity market,” Wolfberg said.
Wolfberg said pent up demand for cars will lift auto stocks as well as the oil patch. He expects increased cash flow and profitability in these spaces.
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