As if the pandemic isn’t enough.
Meghan Shue, investment strategist as Wilmington Trust, says that while the coronavirus is still the biggest risk facing the stock market, another freshening headwind could hobble the recent rally.
“ ‘We are definitely worried about U.S.-China tensions escalating. We’ve seen them bubbling up in recent days and weeks… There are a number of risks that I don’t think are adequately priced into the market that could see a resurgence.” ”
That’s Shue waving a warning flag for investors in an interview Friday on CNBC, in which she was referring to President Trump’s tough talk regarding China.
“There’s not much room on the political stage for anyone that is seen as going soft on China,” she said. “We think the tension with China is going to ramp up.”
Shue warned that the combination of renewed trade tensions and uncertainty over the coronavirus could find its way into a market that has proven resilient since the mid-March lows.
“The market is priced pretty much to perfection right now. A lot has to go right,” she said. “Any misstep on a number of fronts whether it’s to the vaccines or businesses that are not able to reopen as many anticipate — that would be reason for the market to give back some of these gains.”
Still, Shue says investors with long-term horizons of at least a year should remain in the market, as long as they have the stomach for what’s bound to be a volatile stretch.
Stocks looks to be pulling back a bit to start the week, with futures on the Dow Jones Industrial Average DJIA, -0.06% pointing to a lower open.
Watch the interview: