Stocks are struggling to break through to fresh records set last week, but one Oppenheimer analyst sees a renewed push higher sooner than later.
Ari Wald, head of technical analysis at the firm, said multiple technical indicators suggest underlying strength in the market.
2017.”
Michael Binger, president of Gradient Investments, said the fundamental tail winds this year also support the technical bull case.
“Vaccine logistics will get worked out and the case count of coronavirus will get better. You layer on top of that a government that is now committed to stimulus and a [Federal Reserve] that’s committed to low rates. I think these two things lead us to believe that the consensus earnings forecasts for 2021 and 2022 are too low,” said Binger.
S&P 500 earnings are expected to rise by 23% in 2021, according to FactSet estimates, and another 17% in 2022.
He adds that there is likely still cash waiting on the sidelines that should funnel into the stock market over the course of 2021.
“Even though stocks are expensive, the market doesn’t correct usually because of valuation. As long as the incremental news flow is a little better and more positive, I think stocks can grind higher in 2021,” said Binger.
