As the wide securities exchange crawls nearer and nearer to a record high — and shows few if any signs that it's on the cusp of a noteworthy upside breakout — one Wall Street bull is anticipating only that: a major rally.
That is correct. A major rally. As in a potential 15% to 20% move higher in the following six to 12 months. The bullish business sector call originates from Tony Dwyer, expert at Canaccord Genuity.
Also, even Dwyer concedes what alarms him more than anything else is his "high level of conviction" in his cheery call, which he says is not shared by numerous on Wall Street.
So what's giving Dwyer the certainty to put it all on the line and essentially foresee a minibull market — or 20% hop — inside a progressing positively trending market that is currently over seven years of age?
He refers to insights that demonstrate the S&P 500 stock record regularly shoots up pointedly when yields on corporate securities drop strongly, as they've been doing.
He likewise takes note of that when more than 90% of the stocks in the list are exchanging over their normal cost in the previous 50 days, the business sector was up a middle of 16% a year later.
His center proposal incorporates the conviction that a U.S. "retreat is years away." He's additionally requiring a bounce back in the U.S. economy, due to some extent to the almost 100% hop in oil costs subsequent to the February lows and a weaker dollar. More critical, he expects U.S. corporate income to develop and showcase valuations to extend.
Put it all together and you have the formula for a securities exchange rally
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