Chris Harvey, head of stock strategy at Wells Fargo & Co (NYSE: WFC), consultancy unit Wells Fargo Securities, gave its top 10 predictions for 2021 in an interview with CNBC’s Nation of Commerce.
During the show, Harvey noted that markets and stocks could react much faster under current conditions than the ecosystem of two decades ago.
Harvey’s main prediction is that Tesla Inc (NASDAQ: TSLA) could become what AOL was in the late 1990s.
What happened: Harvey said Tesla could face 2021, which AOL did in the late 1990s, albeit at a much faster rate. “After 99, many technology and growth companies lost 50% to 100%,” Harvey told CNBC.
“We are thinking about 2020; everything happens much faster. So, if it took 12 months for the end to start, now it will take six months, ”added Harvey. Apple Inc (NASDAQ: AAPL) Plans to enter the self-driving electric vehicle segment in 2024 could also hurt Tesla’s prospects.
Related news: Why Apple may emerge as Tesla’s ‘first real competitor’
AOL’s inability to keep up with rapid technological innovations has led it to decline over time. AOL was finally acquired by Verizon Communications Inc (NYSE: VZ) in 2015 for a cash value of $ 4.4 billion
Why It Matters: Harvey clarified that these predictions “are not called stocks”, but Tesla’s striking similarity to AOL trends in the past; how to be a company with “game-changing technology” and high future potential, its inclusion in the S&P 500 index and “incredible performance”.
Since the beginning of 2020, Tesla’s share price has risen approximately 6.7 times. Harvey believes that investors should not expect “growth at any price” after the massive increase in shares.
Other predictions for 2021: Among others, Harvey predicts that Republicans will retain control of the Senate based on polls. “It is very good if they maintain control of the Senate for the stock markets,” he said.
Stock charts and quantitative analysis do not have to look good in 2021. According to Harvey, customers should focus on the cyclical nature of the market and include “high COVID-19 beta stocks in their portfolios”.
COVID-19 fatigue and blocking measures will have a negative impact on incumbent reelection efforts.
Medium-sized stocks may do better than large-cap stocks, while small-cap stocks are expected to resurface. Harvey also predicts that market volatility may decrease.
Repurchases of S&P shares may grow twice compared to 2019, and the cryptocurrency may surface as a preferred speculative instrument.
Harvey also labeled 2021 as “the year of not being good enough”.
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