Truist’s Keith Lerner: Present rally solely has about one other 5% upside from right here

Truist’s Keith Lerner urged Friday that the present rebound within the inventory market has in all probability largely run its course, leaving solely restricted positive aspects left within the close to time period.

“We expect the upside on this market might be capped at round 5% from the place we’re at present,” the co-chief funding officer at Truist Advisory Companies advised CNBC.

Given this outlook, Lerner argued that extra relative alternative existed within the fixed-income market at this level. He particularly pointed at authorities and company bonds, as high-quality credit score represents a possible protected harbor amid ongoing financial issues.

“We’re simply actually making an attempt to maintain it easy as a result of our base case is that recession is extra possible subsequent yr. So you do not need to take a variety of credit score danger at this level,” he mentioned.

Though buying and selling this week has been comparatively unsure, shares have typically rallied over the previous month. The S&P 500 (SPY) (SP500) reached a low for the yr of three,491.58 in mid-October however has since rebounded to a detailed on Thursday of three,946.56.

One other 5% advance from that degree would take the S&P 500 to a mark of simply over 4,140. This may return the index to ranges final seen in August.

Even so, the S&P would stay sharply decrease for the yr as a complete. The index reached a 52-week excessive of over 4,800 early within the yr.

The opposite main averages have seen related buying and selling these days. The Dow (DJI) reached a 52-week low of 28,701.65 in October however has rallied again to a detailed of 33,546.32 on Thursday. The Nasdaq (COMP.IND) hit an October low of 10,088.83 however completed Thursday at 11,144.96.

For a better have a look at how buyers have responded to the current market motion, check out the current fund stream knowledge for ETFs, with buyers placing greater than $14B into fund property in the course of the week.