Buyers may even see a satisfying ending to 2021.
In accordance to Canaccord Genuity’s Tony Dwyer, excessive optimism and powerful historic traits ought to offset overbought situations within the market.
The consequence: A report end.
“The internals of the market are still pretty sound,” the agency’s chief market strategist informed CNBC’s “Trading Nation” on Monday.
The Dow, S&P 500 and tech-heavy Nasdaq began the week by closing at all-time highs. The three indexes are additionally on a win streak — up 5 weeks in a row.
“The market hasn’t been that selective, frankly. It’s been the mega cap growth theme as well as the cyclicals,” the long-term bull mentioned.
In his month-to-month technique image e-book out Monday, Dwyer made a case for a 3% to 5% acquire between now and the top of December primarily based on the standard development.
“We believe the year-end opportunity still exists based on history of strong years through October, the improved tactical backdrop, and our core fundamental thesis — but, we would be patient buyers,” wrote Dwyer.
He contends the market backdrop could be very completely different than his “summer of indigestion” forecast.
“The broad market is acting better,” mentioned Dwyer.
However potential heartburn should be across the nook. Dwyer warns the ultimate weeks of the yr will get uneven.
“Broadly, the market should continue higher —a few more percent into year end,” he mentioned. “But it’s going to be a lot more difficult than the last really 9% in the last five weeks.”
Dwyer, who upgraded the market to purchase on October 4 from impartial, prefers cyclical teams proper now. He likes financials, industrials and supplies greatest.
“It really comes down to a cyclical play versus an economically defensive play,” mentioned Dwyer. “The cyclicals still have more room to run into year-end.”