Credit Suisse says there may be opportunity ahead as stocks globally appear poised for a ‘deeper correction’

Stocks around the world are consolidating and there could be more losses ahead, says Credit Suisse’s Ray Farris.

The data is becoming “much choppier” as global growth momentum approaches a peak, Farris, the firm’s South Asia CIO, told CNBC’s “Squawk Box Asia” on Wednesday.

“We’re probably going into a deeper correction in equity markets globally,” Farris said.

He said, however, that a correction may present investors with a “great opportunity” after stocks globally kicked off the year with a strong start.

By the end of the first quarter, the S&P 500 stateside jumped nearly 6% from its final close of 2020. In that same period, the pan-European Stoxx 600 surged around 7.66% while the Nikkei 225 in Japan gained 6.32% and Hong Kong’s Hang Seng index jumped 4.21%.

“Our focus has been to not chase the market higher over the last couple of months,” Farris said. “We’ve been very careful to be stuck at strategic weights for equities in portfolios because we want to have the resources to take advantage of a correction.”

He explained that in the 30 years up to 2019, “the average correction was about 14% but the average gains from that trough of that correction were 39%.” Farris said in 2020 the S&P 500 saw an average correction of about 9%, while the subsequent gains were about 29%.

Markets in a whirlwind

While many major markets posted strong first-quarter performances, equities have been volatile in recent sessions.

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