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'Don't stop believin' in this bull market, PNC says

Getting too bearish on stocks could get ‘very painful,’ PNC’s Amanda Agati says

PNC Financial sees a sustainable relief rally taking shape.

According to co-chief investment strategist Amanda Agati, market players who give up on the bull market will get hurt.

"It can be very painful to miss out or get too bearish as we get into sort of the end of the cycle," she said Friday on CNBC's "Trading Nation." "We're encouraging our clients to really stay the course. Look for pockets of opportunity which are starting to present themselves with all the volatility that we've had."

Her comments came as the major indexes were closing out January's first trading week in the green after wild start. On Friday, the Dow and soared almost 3.5 percent. The surge followed dovish comments from Federal Reserve Chairman Jerome Powell and a strong December jobs report. The three major U.S. indexes pointed to slightly higher openings Monday.

"We really believe for 2019 that the key theme is don't stop believin'. There's still a lot of really strong underlying fundamentals," Agati said. "We've been in a market for a number of months now that's been really driven by peak uncertainty."

Agati is criticizing Wall Street for being overly fixated on negatives originating from headline risks such as Federal Reserve policy and the U.S.-China trade war.

"You're seeing a market that's basically spring loaded to grasp on any positive catalyst after really a drought of positive catalysts over the last few months," she said. "Certainly the shift in tone to a much more dovish kind of stance coming out of Powell this morning [Friday] was really music to the market's ears."

And, Agati believes this could be the catalyst the Street needed to regain confidence, and rebuild portfolios.

But, where to start? She said abroad.

"If I had to pick one area, I probably would go with emerging markets. I mean the technicals are absolutely washed out. The valuation story is very attractive particularly at current levels," Agati said. "China actually has the potential to give us some upside surprises in 2019 in terms of growth. And so, I think that can help the backdrop for the emerging markets."

Why this may be the relief rally that finally holds