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Wall Street's biggest bull says Iran jitters are overdone, the record market rally is intact

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Iran jitters are not derailing Wall Street's biggest bull

It'll take a lot more than escalating tensions with Iran for the market's biggest bull to turn cautious.

Oppenheimer Asset Management's John Stoltzfus believes jitters surrounding Thursday's U.S. airstrike that killed top Iran general Qasem Soleimani is overdone, and he thinks Wall Street generally agrees.

"This type of reaction that we see today is not overly dramatic. In fact, we'd say it's fairy measured," the firm's chief investment strategist told CNBC's "Trading Nation" on Friday.

Yet, the major indexes posted their worst day in a month. The Dow dropped 234 points or 0.81% to close the week at 28,634 while the S&P 500 fell 23 points or 0.71% to 3,234.

The key to Stoltzfus' bullish forecast is meaningful progress on the U.S.-China trade war front.

"We'll gradually get back to where we were before the trade war began in March of 2018 at some point as things continue to get better," said Stoltzfus. "We get some ink on the phase one hopefully by the 15th."

That's when he expects a turning point in U.S. manufacturing data. The latest monthly ISM index report out Friday showed activity shrank to its lowest level since June 2009.

"When I looked at that number and heard the disappointment that a lot of folks were expressing, my only thought was what do you expect? There's no ink on the deal yet," he noted. "Businesses are still hemming and hawing and pausing on investment because they're waiting to see just how soon this happens."

"3,500 is likely to be exceeded this year"

According to Stoltzfus, the nervousness will pass. His S&P 500 year-end target of 3,500 is the highest on the Street and implies an 8% gain from current levels. Stoltzfus' risk bias is to the upside.

"We think that 3,500 is likely to be exceeded this year, but not overnight," Stoltzfus said. "The market will begin focusing on what it focuses on: The economy and the impact potential on revenue."

His top market plays right now are cyclical groups: Technology, industrials, financials and consumer discretionary.

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Wall Street's biggest bull says Iran jitters are overdone