How the S&P Gets to 1,700: Bannister

Investors should expect improvement in global economies, Barry Bannister of Stifel Nicolaus said Wednesday.

On CNBC's "Fast Money," he noted the March 15 headwind from the Cyprus banking bailout.

"That's when you had the rotation to defensive U.S. stocks and away from cyclical stocks. This is a multi-year change," Bannister said. "We have time to be deliberate about it, but I think investors should be positioning themselves for some positive change overseas. The U.S. is leading the world."

He added that the market was consolidating "after a very powerful run."

Bannister, who had been calling for an S&P 500 target of 1,600, recently upped it to 1,700.

(Read More: How S&P Gets to 1,600: Bannister)

"You've seen some tremendous P/E compression on peak earnings fears," he said. "In a way, they're oversold relative to sustainable earnings. The question, though, again is global growth."

Bannister noted that the United States was "first in, first out of a global recession" and looked to the Federal Reserve's lead for a solution.

"The rest of the world really has to follow the Fed and the fiscal script that we've written," he said. "The resistance to that, which you've seen in Germany and China, is really causing this deflationary scare, and as that alleviates we would look to better global GDP growth going forward."