Oppenheimer’s Chief Investment Strategist Brian Belski is optimistic about the fourth quarter.”Although volatility and uncertainty are likely to remain dominant themes heading into the end of the year, excess bearishness, when combined with still solid fundamentals (we believe that 3Q will be another surprising earnings season to the upside), suggests a stock market recovery is likely in the making.”
He notes that the fourth quarter is historically the best quarter for stocks, returning 4.3% on average since 1950. He also adds that stocks do particularly well following summer selloffs.
Since 1950, every time the S&P 500 sold off by more than 10% from April to September, the index bounced 6.8% on average. Furthermore, it generated positive returns 85.7% of the time. However, we can’t reiterate enough that he excludes 2008.
Belski notes that three indicators are reflecting excessive bearishness and “providing a very useful contrarian indication in the current market environment.”
His year-end target for the S&P 500 is 1325.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.