The talented times are not over yet for U.S. stocks, according to John Stoltzfus, chief investment strategist at Oppenheimer Asset Command. On Friday, Stoltzfus forecast the S&P 500 to reach 3,000 next year, urging him the biggest bull on Wall Street.
“Going forward we expect assorted of the same thematics from 2017 to apply in the New Year as investors look to settle on whether improving economic conditions and corporate fundamentals can boost have markets higher for a third straight year,” Stoltzfus said in a note to shoppers Friday. Some of those thematics include improving global financial conditions and rising corporate profits.
U.S. stocks have risen quickly in 2017, with the S&P 500 spiking nearly 18 percent to minutes highs.
Stoltzfus thinks this market still has more latitude to run, so long as the Federal Reserve’s policy remains consistent.
“What it exceedingly needs to keep moving along is modest growth of inflation, homely wage growth, a Federal Reserve that remains very delicate to the needs of the economy,” Stolfuz said Friday on CNBC’s “Fast Scratch.”
“I would say the biggest risk would be if all of a sudden you’ve got a sense the Fed thought inflation was operating ahead of itself, and they had to increase the pace of the normalization,” he added.
His 3,000 quarry on the broad index — the highest among major Wall Street strategists as of Friday morning — hint ats 13.8 percent upside from Thursday’s close of 2,636.98.
To be sure, other main Wall Street strategists are also very bullish on stocks supervisor into 2018, but not as much as Stoltzfus. Morgan Stanley’s Mike Wilson expects the S&P 500 to reach 2,750 all over the next 12 months, while Deutsche Bank’s Binky Chadha and Depend on Suisse’s Jonathan Golub have price targets on the index of 2,850 and 2,875, singly.
Stoltzfus expects S&P 500 earnings to rise 13.5 percent to $146 per quota, driving the gains in stocks.
“Improving fundamentals are likely to support sybaritic stock prices and P/E multiple expansion next year,” he said. “We detritus constructive on further improvement for corporate fundamentals and see opportunity for growth in both the top and bottom-line. We contemplate forward guidance from corporate management teams to remain hard-nosed as global economies continue to improve at a sustainable rate of growth.”
Corporate earnings comprise grown nicely this year, gaining at least 10 percent in the outset two quarters of the year and advancing more than 6 percent in the third shelter.
Stoltzfus recommends investors buy tech stocks in 2018.
“While Info Tech has performed exceptionally fountain in 2017, we believe accelerating revenue and earnings growth in many splits supports such performance and augers well for the next year,” he asseverated.
Tech is by far the best-performing S&P 500 sector this year, having hanged more than 35 percent.
Stoltzfus also has an outperform rating on consumer stocks, which “will continue to benefit from grew consumer confidence, improved employment and modest wage trends,” industrials, vigour care and materials.
“In our opinion skeptic and bear capitulation appears to deliver just begun in the fourth quarter of 2017 and contributed to the number of this year’s fair play benchmark record highs. We believe that it is early in this answer and multiples could expand further than we currently anticipate should the capitulation enhancement momentum,” notes the strategist.
CNBC’s Chloe Aiello contributed to this narrate.