No Fall Correction for Stocks this Year: Investor

Stocks look set to power through the seasonal slump usually seen in the fall, as investors try to chase the earnings-led rally with sideline cash, Alan Miller, founding partner of Spencer-Churchhill Miller Private, told CNBC Friday.

“The autumn is typically when markets have their corrections and when the big crashes have happened in the past, but this year looks like the year to surprise on the upside because I think expectations are set so low,” Miller said.

Consensus expectations for earnings over the next year and a half have actually been nudging higher recently, Miller pointed out. Companies and analysts had slashed their forecasts so sharply that they are now seeing “pleasant surprises” for the first time in over a year, he said.

Those nice surprises are being reflected in rising stock markets, according to Miller.

“Over the short term, I think that as markets rise people are more likely panic to actually invest than disinvest,” he said.

Investors have been keeping a lot of cash on the sidelines and valuations currently aren’t that high, Miller said.

“It doesn’t mean that the problems have all gone and it doesn’t mean that this isn’t going to be a slow recovery rather than a very short one,” he said. “Surprises are more likely to be on the upside than the downside,” he added.

- Watch the full interview with Alan Miller above.

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