A long-time bull debunks 'peak earnings' fears, sees strong year-end rally

Long-time bull Art Hogan sees holes in the "peak earnings" argument.

According to the B. Riley FBR chief market strategist, earnings growth on a year-over-year basis will crest this year — but that doesn't mean it's as good as it gets for investors. He believes the economic picture supports the case for a fresh round of strong numbers that will drive stocks to record highs.

"Earnings growth is going to continue. It's just difficult comps versus 2018," Hogan said Wednesday on CNBC's "Trading Nation."

As of Wednesday's market close, Thomson Reuters reports 81 percent of second-quarter earnings reports have come in above estimates. Since 1994, an average of 64 percent of companies beat estimates.

The long-time bull acknowledges the latest earnings have vastly benefited from the 2017 one-time corporate tax cut. But that's no reason to second-guess the bull market, he said.

"Obviously, we've had great earnings in 2018 thus far," Hogan said.

His year-end S&P 500 target is 3,000, up more than 6 percent from current levels or 4 percent from its all-time high hit on Jan. 26.

Hogan is citing more than just strong earnings as his a chief catalyst. He believes the Trump administration will use midterm elections as a reason to end the trade war, in turn easing uncertainty on Wall Street.

"Right now, we're just pricing in bad news, and that continues to escalate with China. We're starting to see some cracks and some olive branches being brought forward," Hogan said. "That will start to ease some of the concerns corporate America has about trade and tariffs."

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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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