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The global chief investment officer at Guggenheim said Monday that he thought the S & P 500 could rise by 15% and approach 3,500 before the end of the year, comparing current market conditions to a recovery in 1998 following the interest rate cuts.
Scott Minerd said in CNBC's "Half Time Report" that easier monetary policy by the Federal Reserve and central banks around the world would boost equities before the end of the year.
"This rally – whether it's about bonds, stocks, high-yielding stocks or choice, as you wish – is fueled by cash and central banks. around the world basically said that they were going to take on the accelerator, "said Minerd.
The S & P 500 gained 17% in the first six months of this year, the best first half of the index since 1997. However, the Fed is expected to lower interest rates significantly at the end of the month, as domestic inflation and wage growth. accelerated in recent months and international economic growth has slowed.
Minerd compared current market conditions to 1998, when the Fed lowered rates three months in a row, amid concerns over the Asian economic crisis. The S & P 500 has grown more than 28% in the last four months of this year.
"All you have to do is watch the retransmission of the post-Asia crisis in 1998 and get stocks of the level I'm talking about," said Minerd.
The S & P 500 rose at the end of 1998 as the US Federal Reserve lowered its interest rates.
Minerd, who also said he had discussed his membership of the Federal Reserve, said neither Europe nor China can afford a slowdown and that the Fed had "somehow pushed the panic button ".
"You will see the money come out of the central banks in the form of bonds, which will free up capital and which will naturally find another place of migration and eventually end up in the hands of the shares," said M Minerd.
Correction: This article has been updated to reflect that the S & P 500 has increased more than 28% over the last four months of 1998.
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