David Spika, investment strategist at Westwood Holdings Group, told CNBC’s “Squawk on the Street” that the Dow's move about 13,000 is “very appropriate.”
“Look at the earnings growth,” Spika said. “Earnings are well higher than expected for the quarter. A lot of that is the result of very strong international demand, the fundamentals of the economy remain strong, and the valuation of the market is still realistic. The last time we hit these levels on the S&P, earnings were 70% lower. So, I think it’s very appropriate that the market continues to move up.”
He expects earnings to grow 8% this year and believes the Dow Jones Industrial Average can reach 13,500 this year.
“We like technology the best because we think earnings growth will be the strongest there,” Spika said. “During periods of decelerating earnings growth -- and that’s what we’re seeing even though expectations are lower than what’s coming in -- investors pay up for faster earnings growth. In the technology sector, we’re seeing high double-digit earnings growth.”
Spika said there may be volatility in the second quarter, but he doesn’t recommend that investors put their money elsewhere. “We would stay fully invested,” he said.