September may have historically been a tough month for stocks, but that hasn’t stopped National Securities’ Art Hogan from raising his year-end S&P 500 target to 7%.
They acted higher on the basis of a strong second quarter earnings season and sentiment is expected to peak in terms of the COVID-19 delta variant.
“September gives us a chance to restart,” the company’s chief market strategist told CNBC’s “Trading Nation” Tuesday. “I really think we’re seeing an increase in economic activity in September, and I think that will take away the negative sentiment we usually get around September.”
Hogan, who oversees $ 34 billion in assets, raised his S&P 500 target from 4,400 to 4,700 on the first trading day of the month. On Tuesday, the index closed 15 points lower at 4,520. It is still only one percent from its all-time high.
“This has been one of those years where earnings and earnings expectations continue to rise, and it’s where we hit that high target,” Hogan said.
They believe September will reverse historic negative trends due to a strong economic recovery driven by unprecedented fiscal and monetary policies. At the same time, Hogan believes that Delta’s business will peak and create new enthusiasm for the stocks.
Despite the backdrop of adversities and seasonal risks, Hogan is sticking to the game plan he used during the pandemic. He sees the same risk as growth and cyclical stocks as the best way to move quickly in the market.
“Grow at one end of the bar and you can voice opinions on things like cloud security, 5G. [and] Cloud computing, ”Hogan said. “On the other hand, you want to invest in things like finance, industry, and materials for their economic sensitivity and cyclicality.”