Don't Go 'Bottom-Fishing' for Stocks, Harvey Says

Summary

Chris Harvey, CIBC head of equity strategy, advises against bottom-fishing and favors higher-quality companies with positive price momentum. He says Big Tech remains high quality at current valuations and sees high single-digit equity returns this year, with a possible summer or fall melt-up. He expects first-half risk aversion and would buy 5%+ pullbacks, while flagging later-cycle signals such as tight credit spreads and heavy issuance.

• Harvey favors quality and positive momentum; warns against bottom-fishing.
• He says Big Tech is still high quality despite elevated valuations.
• He sees high single-digit equity returns and higher equities later in the year.
• He expects first-half risk aversion and would buy 5%+ pullbacks.
• He sees a possible sharp melt-up in summer or fall.
• He notes later-cycle signals: tight credit spreads, heavy issuance, and policy accommodation.
• He says the Magnificent Seven should not be traded as one homogeneous group.