CNBC: Brace for a 'Gut Check' Summer Sell-off, Investor Peter Boockvar Suggests

June 11, 2020

Article by Stephanie Landsman in CNBC financial

Investors may want to curb their enthusiasm for the market rally.

The Bleakley Advisory Group’s Peter Boockvar warns stocks are vulnerable to a 10% or more summer sell-off.

“That’s when the gut check is going to take place,” the chief investment officer told CNBC’s “Trading Nation” on Wednesday. “Right now, the market is ignoring all the bad news in the hopes that things obviously get better as we reopen.”

Over the next couple of months, Boockvar suspects the market will trade sideways. Once most of the economy reopens, that’s when he warns a wave of profit-taking will likely strike stocks.

“The market is extraordinarily expensive. Now, we have to bifurcate that because a lot of that overvaluation is concentrated in technology,” he said. “Because technology is huge chunk of the S&P [500], it makes the overall valuation metrics pretty high.”

Boockvar acknowledges unprecedented Federal Reserve stimulus policies are a major driver of the rally. But he adds the upside has also been driven by a premature assumption that the coronavirus pandemic has turned a corner.

Despite his pullback position, Boockvar still sees pockets of opportunities.

Boockvar’s main strategy, which focuses on unloved areas of the market, is to find groups that may benefit from an inflation comeback later this year or next year. He expects prices to rise due to the increased cost of doing business in a post-coronavirus world.

His picks include oilgoldsilvercopper and fertilizer stocks.

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