The market bull sees new highs ahead, says don't bet against U.S. consumers

August 20, 2021: -John Stoltzfus encouraged investors to remain optimistic despite the wild market swings of this week. The Wall Street bull, serving as Oppenheimer Asset Management’s chief investment strategist, said that the Covid-19 delta variant and Federal Reserve tightening worries will spark a significant downdraft.

“I not only think it can edge higher, I think it can likely see our $4,700 target for the S&P 500 by the year-end,” Stoltzfus told CNBC on Wednesday.

His S&P 500 price target implies a 7% surge from current levels. The index decreased 1.1% on Wednesday to 4,400.27.

“What we’re going through is quite natural as a transitionary period. We’re coming out of the Covid situation,” said Stoltzfus. “The administration has now moved to have the booster doses available for all adults as of September 20. Now, that looks positive for the economy and the reopening.”

Meanwhile, it appears consumers are tightening their purse strings. The latest University of Michigan consumer sentiment index decreased to its lowest level since 2011. The July retail sales came in softer than expected.

Stoltzfus suggested it’s premature to worry about the impact on spending and slowing growth.

“I’m not surprised at all that the consumers pulled back some,” he said. “It does remain the main risk, appearing we are moving towards it lessening as a risk. And, we think the market will recognize that shortly.”

He said he expects the market to take the Fed’s tapering plans mostly in stride.

“Could we see some volatility? Oh, yes,” he added. “But volatility would be manageable and digestible.”

Stoltzfus said he would use weakness to buy stocks broadly. His primary strategy: a barbell approach that has a bias toward consumer discretionary, financials, industrials, and information technology.