The S&P 500 still appears to hit a mid-2013 target of 1,600, Stifel Nicolaus Chief Macro Strategist Barry Banister said Monday on CNBC.
"It's P/E expansion on more cyclical parts of the economy," he said. "If you look at energy, material, industrials, financials, they tend to trade at lower P/Es. They have a lot of economic doubt built into them. We think they're not that bad."
On "Fast Money," Bannister said that he had thought the S&P would hit the target within the first half of 2013. That time frame represents an update from his December call of the S&P reaching 1,600 in the first quarter of 2013.
The Federal Reserve, he added, was "running red-hot" and was likely to continue its existing monetary policy.
Although gasoline prices could provide headwinds for the stock market, Bannister said that he was "pretty pleased, and we would buy on these dips."
(Watch: Bannister: Look for S&P to Hit 1,600 in Q1 of 2013)
Bannister said a sell-off of bonds would be positive.
"A little bit of reflation is confidence, and it's good," he said. "The market wants the yields to rise as a sign that deflation's been avoided."
Trader disclosure: On Feb. 4, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Pete Najarian is long AAPL; Pete Najarian is long JPM CALLS; Pete Najarian is long YHOO CALLS; Pete Najarian is long RIMM CALL SPREAD; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long DELL; Pete Najarian is long NFLX CALL SPREAD; Karen Finerman is long AAPL; Karen Finerman is long AAPL PUTS; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long FNP; Karen Finerman is long RLGY; Karen Finerman is long MHP; Karen Finerman is long MHP CALLS; Karen Finerman is short IWM; Karen Finerman is short RTY; Karen Finerman is short SPY; Steve Grasso is long AAPL; Steve Grasso is long AMZN; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long GOOG; Steve Grasso is long GDX; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S.
