Months after hitting record highs, the is still marooned below 2,800. To one self-described "unapologetically bullish" portfolio manager, the rally will pick up speed over the summer to surge through year's end.
"We think right now that there's a wall of worry. That's evident because everyone feels the need to apologize for being bullish and we just don't," Federated Investors' Steve Chiavarone said Friday on CNBC's "Trading Nation."
Chiavarone has a 3,100 price target on the S&P 500 for the year, one of the most bullish calls on the Street. That target implies an 11 percent advance from current levels and a 16 percent gain for the year.
The bull case all comes back to the fundamentals, he says.
"Earnings are growing strongly, 20 percent year over year, that looks like it's going to accelerate in Q2, not fade," he said. "We think double-digit earnings growth certainly lasts throughout the remainder of '18 and into '19."
After a 25 percent increase in first-quarter S&P 500 earnings, Chiavarone sees the possibility of plus-20 percent growth in the second quarter. He has set a target of $155 a share for S&P 500 earnings for the full year, though he says it could come in closer to $160.
The biggest threat to his bull case for stocks involves a spike in inflation and an aggressive response from the Federal Reserve, a scenario he sees as hypothetical.
"If earnings are growing 20 percent, I need PEs to fall 20 percent for the market to be flat. They don't fall 20 percent unless you're living in a recession. You need the Fed to get more aggressive to cause that recession and inflation is what would make the Fed more aggressive," he said. "Right now we just don't see a recipe for a real spike in inflation and the numbers are kind of proving that to be correct."
The personal consumption expenditures price index, the Fed's main measure of inflation, came in at 1.8 percent in April. The central bank has a 2 percent inflation target, though it recently said it could let inflation get hotter before it responds with more force.
The Federal Open Market Committee is expected to hike rates when it meets this week. An increase would mark its second of the year and seventh of this rate-hiking cycle.