Amidst the expanding number of Wall Street bears right now, there is Chris Harvey, Wells Fargo Securities head of equity strategy.
The nearly 30-year markets veteran is staying bullish on his outlook for stocks despite the naysayers looking for market plunges into year-end. Harvey is calling for the S&P 500 to end the year at 4,825, or up 8% from current levels.
For Harvey, there continues to be several key drivers of higher stock prices still in play.
"Our 4,825 call is what we call an equity market melt-up," Harvey said on Yahoo Finance Live.
Harvey explained, "One of the things we want to tell clients and investors is that we have history on our side. We look back to 1990 and looked at periods where the equity market was up double-digits in the first eight months of the year. We had nine such instances, and in every single one of those periods the equity market continued to move higher. It was as little as one, as high as 18. We like those odds. We think the fundamentals are also on our side. We think EPS numbers ho higher. We think corporations have been very conservative, and we think ultimately price follows earnings."
To be sure, Harvey's upbeat call on stocks is the contrarian point by most of his peers on the Street as the Morning Brief newsletter discusses.
Deutsche Bank strategist Binky Chadha recently cautioned on the chance for a near-term correction in markets. Bank of America's Savita Subramanian has also issued a warning on the market of her own. Morgan Stanley's Mike Wilson told Yahoo Finance Live a 10% correction lurks.
Stifel strategist Barry Bannister highlighted back in June the potential for the S&P 500 to hit 3,800 before the end of the year.
So the bearish strategists are out in full force, and it would appear money managers are finally beginning to take notice.
Global growth expectations have continued to "fall markedly" in September, according to the latest survey of fund managers out of Bank of America. The survey found that economic growth expectations are at their lowest level since April 2020.
BofA points out that global profit expectations have also fallen "markedly" this month. Profit expectations are at their lowest level since May 2020. The September survey marked a 29 percentage point drop in profit expectations compared to August.
Further, a net 22% of those surveyed by BofA expect profit margins of companies to continue to worsen in coming months. That is up from 15% in August.
Nevertheless, Wall Fargo's Harvey contends the backdrop is ripe to be aggressive on cyclical stocks.
"We want to have more cyclical exposure into this melt-up," Harvey said, adding his firm recently upgraded their outlook for the media/entertainment sector while downgrading the software space.