John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, said he was sceptical that the Delta virus and fears of Fed tightening would trigger a sharp fall in the stock market.
"not only do I think the S & P 500 is likely to rise slightly, but I also think it may reach our target of 4700 by the end of the year," Stoltsworth said in an interview on Wednesday. We will not short American consumers. "
His S & P 500 target means the index will rise 7% from its current level. On Wednesday, the s & p 500 index fell 1.1% to close at 4400.27.
"it is only natural that we are going through a transitional period," Stoltzfuss said. We are getting rid of the COVID-19 epidemic. The government has now taken action to provide vaccine to all adults from September 20. Now it seems that this is very good for the economy and reopening. "
But at the same time, consumers seem to be tightening their wallets. The University of Michigan's latest consumer confidence index fell to its lowest level since 2011. In addition, retail sales were lower than expected in July.
But Stoltsworth believes it is too early to worry about the impact of the Delta virus on slowing consumption and growth.
"I'm not surprised that consumers are spending less," he said. This is still the main risk, but it seems that. We are moving in the direction of reducing risk. We think the market will realize this soon. "
He also said he expected the market to be largely comfortable with the Fed's plan to scale back its bond purchases. "will we see some fluctuations? Yes, "he added. "but fluctuate. Are manageable and digestible. "
Mr Stoltzfuss said he would take advantage of the weakness in the stock market to buy a wide range of stocks. His main strategy is to use barbell investment, preferring non-essential consumer goods, finance, industry and information technology stocks.