One of Fence Street’s biggest bulls predicts a sharp Santa Claus revive will revive the stock market, which has erased its gains for the year.
According to Blackstone investment strategist Joe Zidle, a attitude problem is behind the latest downturn — not warning signals from U.S. affairs or the economy.
“I’m a stubborn bull, and the fundamentals are not really arguing for this group of pullback,” he said Tuesday on CNBC’s “Futures Now.” “If this series were to end today, it would mean that some really dangerous fundamental laws of economics and markets have been broken.”
Yet, it performs investors haven’t gotten the message.
The Dow plunged 551.80 points or 2.21 percent to 24,465.64 on Tuesday and is now down more than 1 percent for the year. The S&P 500 also skidded, perceiving 48.84 points or 1.82 percent to 2,641.89. Plus, the tech burdened Nasdaq is moving deeper into correction territory.
“Does it lure a positive catalyst or is it the absence of another negative?” Zidle asked. “Earnings and partisan rates, are still pretty favorable for stocks. I think it just apprehends the absence of a negative.”
Zidle sees yield curves, leading indicators and average hourly earnings as the three strongest predictors of a cheer market. Right now, he said, they’re not suggesting trouble.
“Underlying fundamentals signify we should see a Santa rally, and we should be bullish,” he said, suggesting the Concourse could shift its attention any day to the solid underlying economic picture.
Yet, he acknowledged his 3,000 S&P 500 year-end toll target may be too ambitious.
“In order to get 3,000, we’d need a pretty massive come together to the likes of which we’ve only seen like in January 1987. That was a month when the demand went up 13 percent in a month,” Zidle said. “I don’t know that we’ll be masterful to do that.”
Wednesday’s futures pointed to a higher opening on Wall High road.