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Nvidia’s Rally Fuels Global Market FOMO: Evercore’s Julian Emanuel

Fear of missing out underpins 'overcrowded dynamic market': Evercore ISI's Julian Emanuel

Evercore ISI’s Julian Emanuel thinks Nvidia’s monster rally is fueling fear of missing out on the market.

He finds that clients, including those who traded during the dot-com boom and subsequent bust, are more concerned about being underinvested than overexposed at present.

“This is the first time this has happened to us since 2021,” the company’s chief executive said Monday on CNBC’s “Fast Money.” “It’s a bit of a wake-up call.”

In his Sunday note, Emanuel warned clients that there are similarities with the emergence of Y2K, particularly regarding dynamics. This time around, he cites enthusiasm around artificial intelligence and the idea that the United States will avoid a recession as major catalysts.

“The feeling is very, very optimistic. The bears have been eliminated,” he told CNBC’s Melissa Lee. “It’s time to think more about risk than reward until we can calm down a little.”

Monday, the Dow closed at a record high at 38,797.38. The heavy on technology Nasdaq Composite is up 6% so far this year and is less than 2% from its record high.

In the meantime, Nvidiathe world leader in artificial intelligence chips, is up 46% year to date and 240% over the past year.

Emanuel estimates that stocks could fall 13% this year, which he considers normal outside of a recession. “If you don’t see yourself being a buyer there, you should probably relax a little,” Emanuel said.

However, he did not completely ignore the growth-winning sector.

“We’re on board in pieces,” he said. “We like Communications Services. It’s a great sector. We believe there are defensive properties.

Emanuel’s top picks also include basic consumer goods, health care and money markets.

“At the end of the day, you still earn 5% in cash,” he added.

Her S&P500 the year-end target is 4,750, implying a loss of about 5% from Monday’s close.

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