Price Headley Calls for 10% Gains by Mid-Year, CNBC Interview

Posted by jbrumley on January 3, 2017 1:48 PM

"I think we've got obviously a very positive new administration coming in. There's a lot of skepticism like your other guests here , who basically believed in the market but now believe we're going to stall out here and that Trump can't deliver. But remember, he's got a Republican congress that can help change a lot of things that can help the U.S. stock market keep leading to the upside. I believe stocks are still the only game in town."

That was Price Headley, BigTrends founder and CEO, in a phone interview with CNBC Monday evening. Headley also noted an encouraging stat: There's $50 trillion in cash still on the sidelines waiting to be deployed somewhere, according to Blackrock.

A handful of headwinds are still blowing, though. As Headley explains "There are risks as it relates to the strong U.S. dollar is going to make it difficult for U.S. multinational companies, so I'm saying avoid the Coca-Colas (KO), Procter & Gamble's (PG) and even McDonald's (MCD)."

Those headwinds don't apply universally though. Headley added to his outlook "I think there are several sectors that can benefit. Oil is still in a great recovery. I love and own Chevron (CVX). It's still one of the Dogs of the Dow even after a 30% rally this last year. I think it's [CVX] still got another 20% upside. Retail stocks are too beaten-up. I think they've got room to recover because Trump's going to lower taxes and that's going to help put more money in consumers' pockets here in the States, and that means they can spend it on things like at Wal-Mart (WMT) which I think has a 20% upside."

The most pleasant surprise of all for 2017, though, may come on the interest rate front.

The Federal Reserve's current projection calls for three more rate hikes in addition to the one logged in December. Headley doesn't expect the nation's central bank to fully follow on that aggressive plan, however, explaining "The Fed saying they're going to tighten three times in 2017 -- I think that's not going to happen. I think that's way extreme. The Fed is talking tough, but I believe the positive surprise is going to end up being the Fed does at most two tightening -- and maybe just one -- and that's going to keep people positive about stocks."

Listen and watch the interview.