One of Wall Street’s biggest bulls is getting even more optimistic.
Canaccord Genuity’s Tony Dwyer boosted his 2020 year-end S&P 500 price target by 90 points on Monday to 3,440, reflecting about a 10% gain from current levels. Dwyer cites an easy Federal Reserve and low inflation as two major drivers in his updated forecast.
“Low inflation equals an easy Fed,” the firm’s chief market strategist told CNBC’s “Trading Nation” on Monday. “I don’t think the Fed is going to raise rates potentially for years.”
His updated target comes just two days before the decade’s final Fed decision on interest rates.
“The 2019 bull story that we have come up with was that there was going to be a lagged effect of policy tightening in 2018. And, you were going to see an economic slowdown that didn’t end up in a recession because of a good consumer, but was slow enough. It got the Fed to go from tightening to easing,” Dwyer said. “Now, we’re looking for this reacceleration.”
Dwyer calls the situation “extraordinary.”
Even if the U.S.-China trade war continues deep into 2020, he believes stocks will still see another record year. He points out the S&P has soared 25% this year despite the trade headlines dominating the market.
His reasoning: it all comes back to the Fed. Due to easy monetary policy, Dwyer believes there’s not much for investors to fear right now.
“The story for 2020 is going to be … better growth with a neutral Fed,” said Dwyer.
Right now, his S&P price target is second highest on the Street, behind BTIG’s Julian Emanuel by only 10 points.
Canaccord Genuity’s Tony Dwyer predicts the S&P 500 will rally almost 10% from current levels.