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$6.6 billion money manager calls stocks 'cheap,' predicts they'll surge to new highs this year

Market bull Bill Stone sees stocks having a record breaking year

Bill Stone never wavered from his bullish case during the market meltdown.

And now, the Avalon Advisors chief investment officer is calling for a banner year for stocks.

"There's no doubt stocks are cheap relative to bond side of the equation," he said Wednesday on CNBC's "Trading Nation." "You could have a good market."

Stone, who manages $6.6 billion, sees the surging more than 13 percent from current levels to at least 3,000 by year-end. The S&P all-time high is 2,940, hit on Sept. 21.

What could get the markets there? Stone said not much — just "decent news on the economy."

He acknowledges the risks that helped spark the late 2018 correction haven't entirely disappeared. There are still jitters surrounding the global slowdown, the U.S.-China trade war and Brexit. Plus, Wall Street is now trying to calculate the impact of the historic government shutdown.

However, Stone contends one major source of worry for Wall Street has mostly subsided: a Federal Reserve that was planning to raise interest rates several times in 2019.

"Part of the problem was the worry that the Fed was going to have a policy error, and throw us into recession. That has really receded," said Stone. "The markets are assuming maybe no hikes."

As a result, Stone predicts the most beaten-up groups from the correction could see a solid rebound in the coming months.

He likes financials, semiconductors, technology and consumer discretionary stocks.

"We still like the consumer," Stone said. "We think wages will continue to go up, and we'll have some good job growth."

“No doubt stocks are cheap,” market bull Bill Stone says