PNC Financial’s Amanda Agati isn’t ready to enter the bear camp despite a tumultuous week on Wall Street.
Agati, who is the firm’s co-chief investment strategist, believes a strong earnings season will revive the markets and boost confidence among investors.
“We’re trusting the bounce. Really, we think the fundamental backdrop for the economy and the markets continues to be very strong,” she said Friday on CNBC’s “Trading Nation.”
Her thoughts came as the major indexes were posting their worst week since March. The Dow jumped 287 points to 25,339.99 on Friday, but still lost 4 percent for the week. The S&P 500 rallied Friday to close 1.4 percent higher at 2,767.13.
It came as J.P. Morgan Chase kicked off earnings season with a beat. The bank reported a quarterly profit of $2.34 a share, topping the consensus by 9 cents. Its revenue also surpassed Street forecasts. However, its investment banking peers Citigroup and Wells Fargo reported mixed results.
“We’re still very positive on Q3 earnings season,” she said. “One day does not make a trend, and so we really think that Q3 is going to set up to be pretty solid. … As long as Q4 guidance looks pretty solid, too, I think that’s great news for the market.”
Yet, Agati expects volatility will stick around for a while — clarifying that she’s “not blindly bullish” due to the late economic cycle environment. Still. she has two ways to play it.
According to Agati, adopting a stock picker’s strategy instead of targeting broad sectors should garner solid profits for investors. She’s also turning positive on a group that Wall Street has been largely avoiding.
“The valuation story is getting really attractive: Big spreads in terms of valuations between EM [emerging markets] and the developed world,” Agati said. “That could be a really interesting backdrop sort of near-term opportunity for the market.”