Guggenheim's Scott Minerd says stocks can rise 10% or more over the next year

Published Mon, Oct 18 20211:48 PM EDTUpdated Mon, Oct 18 20213:12 PM EDT

Jesse Pound @/in/jesse-pound @jesserpound

Guggenheim's global chief investment officer Scott Minerd said Monday that the stock market could jump 10% or more over the coming year and the risks from inflation or rising interest rates are limited. Minerd told CNBC's Brian Sullivan at the Milken Institute Global Conference that stocks were set to make a significant move higher after a rocky few months. "I think the stocks will do well," Minerd said in an exclusive interview for CNBC Pro. "There's the short run, which is the seasonal correction that we just went through. I think that's over now. I think we've got a firm foundation under stocks for the time being. For the next year, stocks will be great — 10 to 20% [higher]." He added that he could see the S & P 500 , which traded near 4,480 on Monday, rising to 5,000. Minerd, who correctly called a pullback in the 10-year Treasury yield earlier this year, said that yields in the bond market would not rise too much in the near term, providing support for equities. "Our work shows that, given the amount of leverage in the system, the Fed, even if it begins to raise rates, can't get rates much past 2% before the economy begins to stall out," Minerd said. He said the 2% level should serve as "pretty much a cap" for the 10-year Treasury yield. The central bank has signaled that it could begin to start winding down its asset purchases later this year . A rising number of Federal Reserve members, as of the central bank's September meeting, expected a rate hike in 2022. Minerd, who has previously said that the bond market is still experiencing a decadeslong decline of yields, said that the "center of gravity" for the 10-year yield is lower than where it is currently trading, near 1.6%. Yields move inversely to prices. He added that rising inflation would prove to be just a "scare" and compared it to the short-lived increase in prices that followed major wars in the past. "I don't think it's six years, and I don't think it's six months," he said. "We have to work out the supply chain interruption. [But] we're already seeing deflationary pressures coming out of areas like hospitality [and] airlines."

Scott Minerd, Guggenheim Partners

Scott Mlyn | CNBC