The case for why stocks could climb 20%
New York(CNN Business) The stock market has been on a roller coaster ride lately, as investors focused on every twist and turn in the fraught economic relationship between the United States and China. But Brian Belski, chief investment strategist with BMO Capital Markets, thinks Wall Street is overreacting.
He argues that if investors take a long-term view, they'd see that the economy and corporate earnings are still expected to grow at a healthy clip. After all, interest rates, inflation and the unemployment rate all are low.
With that in mind, Belski has a bull case for the S&P 500 to hit 3,400 over the next year. That's a nearly 20% jump from current levels. He recommends tech, telecom, health care, industrials and financial stocks as sectors that should do well.
But even if stocks don't surge between now and the end of 2019, Belski said he believes the most likely scenario is for the S&P 500 to return to 3,000 — the level it hit before pulling back on trade fears and worries that the Federal Reserve may not cut rates as aggressively as investors had initially hoped.
"Despite the ebbs and flows of this market and the recent performance volatility, we continue to believe the overall fundamental and macroeconomic backdrop remains supportive of US stocks," he wrote this week in a report.
Belski will talk about this with CNN Business correspondent Alison Kosik on the "Markets Now" live show Wednesday at 12:45 pm ET. Kosik will also be joined by Amy Shecter, the CEO of on-demand beauty services company GlamSquad, to discuss the firm's partnership with CVS (CVS) and the state of the fashion industry.
"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 pm ET. Hosted by CNN Business correspondents, the 15-minute program features incisive commentary from experts.
You can watch "Markets Now" at CNN.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.
