Evercore ISI’s Julian Emanuel has warned of potential financial stress in the market, comparing the current situation to the year of the savings and loan crisis and the epic crash on Wall Street. The senior managing director stated that the uncertainty of the current environment is extremely high, especially after Fed chair Powell’s suggestion of a 50 basis point hike. Emanuel highlighted the rapid decline of the 2-year Treasury Note yield following the Silicon Valley Bank collapse, noting that it was only rivalled by the decline seen in 1987 when Greenspan introduced the “Fed Put” and cut rates by 75 basis points during the crash.

Emanuel also warned that more issues may arise, particularly if the Federal Reserve continues to hike interest rates, which could lead to a recession. He forecasted a mild recession and a retest of the market low from last October. However, Emanuel maintained his S&P 500 year-end target of 4,150, set in December, which represents an 8% gain from Monday’s close. Emanuel stressed the importance of monitoring how credit trades going forward.

In conclusion, Evercore ISI’s Julian Emanuel is warning investors of potential financial stress, drawing comparisons to past critical times on Wall Street. While he maintains his year-end target for the S&P 500, Emanuel cautions that more problems may arise, and it is important to be cognizant of how credit trades in the market.