BMO Capital Markets chief investment strategist Brian Belski said the US markets will witness the continuation of this year’s “unprecedented” rally and the next bull cycle will take 10 years.
Belski commented, “We believe that US stocks entered a 20-year bull market in 2009. We remained consistent in this call and, in fact, we believe in decreases in stock market prices worldwide, but we emphasize that the bull has 10 years ahead of the bull, especially as we said on March 23, 2020 in the USA.
Rhetorical and Fearful
Belski added that the stock market correction in March was a “rhetorical and fear-induced” overreaction.
Stating that stocks in the US will grow by 15% in 2021, Belski uses the following statements:
“In terms of our 2021 forecast for the US stock market and the S&P 500, our price target for earnings of $ 175 is 4,200. This equates to about 35% increase in earnings growth and about 10-15% of the price. In 2021, we will see an unprecedented increase in gains as we emerge from these low bases and slowly return to run mode. ”
Belski noted that in terms of normalization of the economy, a full recovery would take another two or three years.
As regards sector bias, Belski, at the discretion of the consumer, finance, industry; neutral on consumer fundamentals, communication, technology, materials and healthcare; and offers a low-weight image in energy, public services and REITs.
Belski stated that although the earnings increase did not capture the price appreciation this year, higher valuations did not signal a decline for the stock market.