The US stocks rebounded from the coronaviruses sell-off.
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Brian Belski, the top investment strategist at BMO Capital Markets, predicted on CNBC in March 2020 that there would be an "epic move to the upside" in US stocks.
He was correct when he said that the S&P 500 could rally more than 15% to 5,300 by the end of the year.
Belski believes that company earnings will stay strong, central banks will remain supportive, and that inflation and supply chain problems should cool.
I think people are too focused on inflation and next year will be a good one. He told Insider that they were too focused on the negative.
The United States stock market is in great shape. We have the best assets in the world.
Belski was not fond of market bears such as Jeremy Grantham and Michael Burry, who have warned of a crash in the stock market.
He referred to the folk tale character who warns the sky is falling as a "Chicken Little" strategist. He said that many of them have had the same call for three years and missed the entire move.
The Fed should not hurt the stock market.
Belski and his colleagues laid out their reasoning behind their bullish forecasts in a note earlier in November, brushing off concerns that stocks will suffer as the Federal Reserve tightens monetary policy.
The Fed will reduce its bond purchases by 15 billion dollars a month in response to high inflation.
The Fed's balance sheet will remain large for a long time, which should support stocks.
They said that even if the US central bank hikes interest rates in the middle of next year, they still think that the stock market will stay strong.
The S&P 500 has fallen 1.9% on average in the three months following the first rate rise from the Fed. The index gained 7.5% over the next 12 months, but it did well after that.
Earnings will stay solid as inflation will cool.
Belski thinks that inflation will cool next year as supply chain issues are fixed. The US consumer price index is expected to fall from the 6.2% year-on-year rise in October to an increase of 2.4% by the end of the decade.
Belski believes that corporate earnings will drive the stock market higher. He said that earnings growth is still growing. S&P 500 earnings are expected to increase by the close of next year.
Belski and his colleagues think that the recent performance of stocks will cause them to hit some turbulence before they resume their march higher. Trying to time the market is very difficult and that a "stay-invested strategy" is the best bet.
Business Insider has an original article.
