A Biden win could spur a 'knee-jerk' 5% pullback in the stock market, but investors should seize the buying opportunity, Credit Suisse strategist says
- Suresh Tantia of Credit Suisse told CNBC on Thursday that a Joe Biden win could spur a "knee-jerk" 5% pullback in the stock market given the Democratic nominee's stance on corporate taxes.
- However, this pullback would be a buying opportunity for investors because long-term Federal Reserve support would continue to drive markets after the election, the senior investment strategist said.
- Tantia said investors should seek out stocks in Asian markets, as they're cheaper than US stocks and have strong earnings.
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Suresh Tantia, a Credit Suisse senior investment strategist, told CNBC on Thursday that while a Joe Biden win could cause the stock market to see a "knee-jerk" reaction in the form of a 5% pullback, this could be a buying opportunity for investors.
The investment strategist said such a pullback could occur with a Biden win because of the Democratic nominee's proposal to raise corporate taxes. However, the Federal Reserve will drive the markets in the longer term, Tantia said, so investors should view a pullback as a time to buy stocks at a discount.
"The central-bank support is not going anywhere. The Fed is going to keep rates lower for longer, similar to other central banks," Tantia said. "So as they are injecting liquidity in the market, I think equity markets will bounce back. So we would want to use that pullback as an opportunity to buy into equities."
Tantia also cited "encouraging" macroeconomic data from countries in Asia and suggested investors seek out stocks there instead of the somewhat expensive stocks in the US.
"Given the election risk in the US and more expensive valuation, I think the Asian markets look more interesting," the strategist said. "Strong economic recovery, strong earnings, and much cheaper valuation compared to the US equity market."