James Demmert, chief investment officer at New York-based Main Street Research, argues that the current pullback reflects a healthy reset more than than a harbinger of more declines to come. He sees echoes of the October 2022 bear-market bottom, which developed into a two-year rally.
"Market retests are relatively common during corrections, and the fact that we are seeing this retest play out within weeks is further confirmation that we are in a correction and not a bear market," said Demmert, who pegs his year-end price target on the S&P 500 at 7,050 points. That'd be a 26% increase from the March 28 close.
"Next Friday is the start of earnings season, which is exactly the kind of catalyst this market needs to move past this correction," he added.
"We expect earnings to be much better than expected, especially since the bar has been lowered across the board due to this market correction."
This article also appeared on Yahoo Finance.
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