Kleintop said better earnings numbers and increasing M&A activity will help the markets rally further.
“Companies are dramatically revising their guidance and new buyers are coming into the market,” he said. “Just last week and a half, we saw it in technology, consumer discretionary and energy. These bids are coming in—20 to 30 percent premiums, that’s lifting target prices. The acquirer stocks aren’t going down either … If you combine that with better fundamentals on the earnings front, there’s more legs to this rally.”
Investors shouldn’t expect a big pullback because there not going to get them, said Kleintop, suggesting that 1,000 and upper 900s on the S&P are good opportunities for investors to start buying into the market.
In the meantime, Lutts said he is bullish on the alternative energy sector.
“I like very much what’s going on in Washington in terms of cap and trade,” he said. “We’ve got real change in the auto industry and we like a couple companies like Johnson Controls, Saft Group—they’re both in the hybrid battery business.”
Lutts said the auto industry has not seen dramatic changes in the last 20 to 30 years and so the next decade will be the year of change.