Ever since Wall Street hit the records over six months ago, it has been dealing with conflicts in trade, instabilities in the European market, and sell-offs by some of the largest companies in the tech sector.
Tony Dwyer, market strategist believes 2018 will be a good year in terms of profit growth
According to one of Wall Street's biggest bulls, it is time for Wall Street to circle back to the basics now. The chief market strategist at Canaccord Genuity, an investment banking and financial services company, Tony Dwyer said that at this point, there is only one thing that is driving the market. All we need to do is track the direction in which the earnings are headed.
Dwyer has said that earnings will continue to increase as of this year.
The fiscal 2018 S&P operator earnings forecast was revised by Dwyer from $155 per share to $160 per share according to the reports released last week.
Up until now, investors were worried whether the marked growth of profits in the first quarter of this year will go down over the coming months. These fears were, however, put to rest in May. Dwyer has said that with the strong economic data, he expects profit to continue growing all throughout this year and even the next.
Dwyer said that he had intentionally waited until June to increase the earnings in the fiscal forecasts as he wanted to make sure that the peak growth in the first quarter would not fade. He said that the National Federation of Independent Business or the NFIB, the largest small business association and consumer sentiment are at an all-time high, a clear indicator that the economy is not going down.
Several other financial analysts share the same view as Dwyer as well. The S&P 500 profits had increased by 25 percent in the first quarter of this year. After a survey, analysts are now expecting a growth of 20.7 percent for the entire year.
Dwyer has also said that when there is a sign of recession, then that is the perfect time to sell your weaknesses.
Dwyer has also said that this year, he expects profit growth to have a huge impact on stock growth. He even increased the full year S&P 500 price target from 3,100 to 3,200 based on the forward earnings. This is the highest on Wall Street. This is followed by UBS at 3,150.