A top strategist suggests the market is settling down.
Despite Covid-19 omicron risks, Oppenheimer Asset Management's John Stoltzfus suggests Tuesday's market bounce is real.
"We believe in it. We think investors should as well," the firm's chief investment strategist told CNBC's "Trading Nation." "The selling that we've seen over the last few days was overdone."
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According to Stoltzfus, the month's negative headlines surrounding the omicron variant and the Federal Reserve's tightening plans flushed out investors with weak hands.
"Hopefully, next year the Covid-19 and its nasty variants move into the rear-view mirror," he said. "We also expect to see the Federal Reserve successfully manage the process of tapering."
The S&P 500 closed up 1.8% to 4,649.23 on Tuesday. It's now 2% below its all-time high of 4,743.83, hit on Nov. 22. But the index is up 1.6% so far this month and up 23% for the year.
Money Report
"Fundamentals are getting better going forward," said Stoltzfus, a long-term bull. "Stocks are responding to that fact."
His 2022 year-end S&P 500 forecast is 5,330, a 15% jump from current levels.
Stoltzfus sees improved earnings ahead and lists information technology, consumer discretionary, financials and industrials as the biggest beneficiaries.
"You're going to find that in the cyclical sectors as well as in technology," said Stoltzfus, who expects the upgrade cycle for businesses and consumers to accelerate.
On Tuesday, the tech-heavy Nasdaq also staged a rebound. It jumped 2.4% to close at 15,341.09. The index is still negative for the month, down 1.3%.
