Money manager Kevin Nicholson expects the stock market to stabilize and rise in early 2021.
But the co-chief investment officer of global fixed income at RiverFront Investment Group warns it’ll come at a cost to the jobs market.
“Companies are going to right-size their business,” Nicholson told CNBC’s “Trading Nation” on Thursday. “This is going to create the divergence between the economy and the market.”
According to Nicholson, it’ll be a major setback to the economic recovery from the Covid-19 due to the hit to consumption.
“A lot of these workers who were furloughed will not end up going back to work,” he said. “They’re going to become permanently unemployed.”
Nicholson already sees the trend unfolding in this week’s layoff announcements from Citigroup and Wells Fargo.
‘The pandemic pledge’
“The pandemic pledge that a lot of companies put out there will go away as they move towards focusing on profitability,”