He said corporate buybacks, private equity deals, higher dividends and M&A activity are all supporting stocks.
About half the revenue of the 30 Dow components is earned overseas, and that strength won’t change in the future, Gendreau said.
“We like the fundamentals for the market,” Gendreau said. “I wouldn’t be at all surprised if the market ends the year higher than it is today. The earnings picture is still pretty good –- the consensus is even looking for a pickup in earnings growth to a double-digit pace in 2008.”
But he urged caution.
“The S&P is way above its moving 200-day average, margin debt is at an all-time high, and available cash is the lowest it’s been since November 2000,” Gendreau said. “So, I wouldn’t be surprised if we had some sort of correction. Maybe 'correction' is too big a word -– maybe some sort of downdraft like we had in February. (I) think there’s a lot of vulnerability in the market.”