Brace for 10 Percent Pullback: Knapp
Online Producer
Weak growth numbers will hit a couple of sectors hard in the second quarter of 2013, Barry Knapp of Barclays said Monday.
"What we think is likely to happen in the second quarter is the culmination of weak growth numbers, primarily attributable to fiscal contraction – and I care less about the sequester and the spending cuts than I do about the tax hikes," he said on CNBC's "Fast Money."
Knapp added that he believed the sectors with the highest domestic exposure to the United States would be most affected, particularly consumer discretionary and financials.
In December, Knapp called for a correction in the stock market of 10 percent in the first half of 2013.
Since then, Washington avoided going over the so-called "fiscal cliff" and the federal budget sequestration still looms, but those risks appeared lessened, he said, adding that he expected that "basically the direction of the government spending, the deficit and even the rate of change of increase in the debt would start to stabilize a bit."
Knapp said that meant growth numbers would be what cause the correction.
Trader disclosure: On March 11, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephen Weiss is long BAC; Stephen Weiss is long C; Stephen Weiss is long OI; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long MJN; Joe Terranova is long AXP; Joe Terranova is long GPS; Joe Terranova is long KORS; Joe Terranova is long SWN; Joe Terranova is long GS; Simon Baker is long AAPL; Simon Baker is long WFC; Simon Baker is long FB; Simon Baker is long GOOG.
