Here’s why the next 10% stock move is likely to be down, warns Miller Tabak’s top strategist No ratings yet.

Thank China (again) for what looks like another bullish day on Wall Street after Beijing pledged to halve tariffs on $75 billion in U.S. imports, while political uncertainty has eased after the Senate acquitted U.S. President Donald Trump. That is as investors have decided the deadly coronavirus isn’t a reason to sit on the sidelines of markets.

But all that appetite for investing in equities, which tends to invite more risks than other asset classes, is worrying a few. “The odds that the next 10% move is to the downside versus the upside, I think, are much higher,” Miller Tabak + Co.’s lead strategist Matt Maley told MarketWatch in our call of the day.

Maley said the market has been “priced for perfection” for a while, making it harder to rally much higher from here.

And because most individual investors had a pretty stellar 2019, they don’t need to go chasing the stock market or the movements of bigger investors right now, he said.

“At the beginning of the year, if the market is rallying, [institutional investors] have to be in… they can’t fall behind their bogeys early in the year, because they spend the rest of the year playing catch-up and it’s too hard to do,” Maley explained, adding that those big players must buy stocks in a rising market regardless of their longer-term goals.

And regular investors shouldn’t invest on the theory the market will take off like it did in 2019. “Too many people talk about the extremes too often. ‘Oh my gosh, I’m going to miss another 30% rally like we got last year.’ Or ‘The stock market’s going to crash,’” he said.

Most years, the stock market ends up somewhere in between and “right now with the market as extended as it is, I just don’t think chasing it is a great idea,” said Maley.

The last word goes to Citigroup’s chief U.S. equity strategist, Tobias Levkovich, who said in a recent note that nearly “every client we talk to wants to buy the dip, and that is not comforting.” While the coronavirus’s spread outside of Hubei has slowed, “we are reticent to think that impact is behind us now,” he said.

The market

The Dow

DJIA, -0.05%

  , S&P

SPX, +0.08%

  and Nasdaq

COMP, +0.17%

 are potentially looking at record sessions, as trading kicks off in the green, with European stocks

SXXP, +0.29%

also higher, despite dismal German manufacturing orders. Oil

CL00, -0.89%

 is climbing and Asian markets surged, with Hong Kong

HSI, +2.64%

 and Japan

NIK, +2.38%

 stocks climbing over 2% each.

The chart

As Iowa Democrats continue to toil away at those presidential caucus results, this Goldman Sachs chart shows which candidates’ chances have improved — Pete Buttigieg — and gone the other way — former Vice President Joe Biden.


The buzz

Shares of Twitter

TWTR, +15.18%

are surging after the microblogging service posted is first $1 billion revenue quarter, and beat forecasts for user growth. Makeup giant Estee Lauder, cigarette maker Philip Morris

PM, +5.22%

PM, +5.22%

and Kentucky Fried Chicken operator Yum Brands

YUM, -3.24%

also reported. After the close, ride-share group Uber

UBER, +0.43%

 and videogames companies Activision

ATVI, +1.26%

 and Take-Two Interactive

TTWO, +3.13%

 will report.

Tesla shares are down another 3%-plus after the electric-car maker tumbled 17% on Wednesday

TSLA, -4.63%

 . 

The World Health Organization wants $675 million to battle the coronavirus, amid the biggest jump in cases in the last 24 hours since the outbreak began. China’s confirmed cases surged to 28,018 and at least 563 deaths, while more quarantined passengers got sick on cruise ships.

The economy

Weekly jobless claims fell 15,000 to return to a near 50-year low, productivity rose at the fastest pace in nine years, while unit labor costs rose modestly. So, onto Friday’s jobs data looms.

Random reads

This badger and coyote friendship is everything right now.

Hollywood legend Kirk Douglas dies at 103.

Others are also being remembered:

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