John Stoltzfus is managing director and chief market strategist at Oppenheimer & Co. Prior to joining the firm, he was senior market strategist at Ticonderoga Securities, where he provided all macro, market outlook and strategy ideas to the firm and its clients. ETF.com recently sat down with Stoltzfus to discuss his outlook for U.S. stocks, which is one of the most bullish on Wall Street.
ETF.com: What underpins your bullish outlook on the U.S. stock market?
John Stoltzfus: The fundamentals are improving. Despite all the challenges that exist in the system, the economic expansion has shown sustainability. In the second quarter, U.S. GDP grew 3.9 percent. It's likely to come in around 2 percent for the third quarter.
The current earnings season is not a barnburner by any means, but it is one where we're seeing a good number of upside surprises by large-cap names, some of whom even have global exposure and have been able to improve in spite of the strong dollar.
In addition to that, the Fed remains extremely accommodative. Interest rates are next to zero. The Fed will probably not raise them this year, though there's a good chance that it will raise them the first quarter of next year.
We believe the market will anticipate a better 2016 than 2015 was for the economy and earnings. Our year-end target for the S&P 500 is 2,311, which would imply a 13 percent upside from the levels we are at today [Oct. 22].
ETF.com: That's quite a big upside move in a short period of time. Most analysts have cut back their targets, but you're sticking with it?
Stoltzfus: Yes. We're one of two strategists left with a 2,300 target. It looks like a stretch now, but we put that target out last November when we were looking for an overall gain of about 12 percent for 2015 based on an improving economy.
The Chinese devaluation in August was problematic, along with concerns about global growth. Then we also had uncertainty about what the Fed will do with interest rates. Together, these caused this correction that we had over the summer. That said, we think the market will reward investors who have patience.