Bill Strazzullo, chief market strategist for Bell Curve Trading, told CNBC’s “Closing Bell” that first quarter earnings estimates may have been too low.
So far, 70% of the companies reporting have had earnings above expectations, 18% have been in line with the consensus estimate and 12% have missed their numbers.
“Ever since the end of March, momentum has been bullish,” Strazzullo said Tuesday. “Since March 30, it’s been up, up and away. We’ve had nine out of ten closes on the plus side and today it looks like ten out of 11. The issue here is that we still have people who are caught offside from the the late February sell-off. You’ve got some key earnings surprises, information on the economy that’s better than expected.”
He looks for 1,500 on the S&P 500, 13,000 to 13,200 on the Dow Jones Industrial Average, and 2,550 to 2,600 on Nasdaq.
But Thomas Higgins, chief economist for Payden & Rygel, was cautious.
“I think we will make gains for the year in the equity markets, but I think there could be some volatility along the way,” Higgins said. “We are at a turning point in the U.S. economy. There’s still some debate over whether inflation fears or the softening of the economy is going to win out in terms of Fed policy.”