Why Carson's Ryan Detrick Predicts New Market Highs by Year End

Inflation for autos and shelter should continue to calm, “as shelter really could start to put a lid on overall inflation as rent prices are coming back to Earth quickly.”

No Imminent Recession

“We just don’t see any major signs saying a recession is imminent,” Detrick said, noting that economists and analysts have been anticipating one for over a year and a half.

“We still see a strong consumer, we still see a strong labor market, we see manufacturing start to showing bigtime signs of improvement,” he explained.

Earnings Are Strong

“Earnings continue to impress,” Detrick said, citing FactSet data indicating forward 12-month S&P 500 earnings at an all-time high, at $240 a share.

“What we saw the last couple of months when some worries popped up, corporate America still was saying ‘Hey, we see see better times coming and stronger earnings,” and that’s something Carson is stressing to advisors.

“We’re probably going to have record earnings growth next year,” which doesn’t happen in recessions, Detrick said. “This bull market is still alive and well into next year.”

He noted that the S&P 500 and Dow Jones Industrial Average aren’t even at all-time highs. “There’s plenty of gas in the tank,” he added.

In terms of market sectors, Carson is market neutral toward tech stocks, given valuation concerns, and sees opportunity in cyclicals, industrials, energy and financials for the rest of 2023. “Those areas could outperform and do better than technology,” which may take more of a “breather” than the rest of the market, Detrick said.

Negative Sentiment

The market is showing “pockets of negativity” on just the 5% correction, and “we like that,” Detrick said, noting that Carson was “very lonely’ predicting a strong strong market and economy coming into 2023.

“We want to see the weak hands being flushed out, we want to see some negativity,” he said, adding that some long-term market bears threw up their hands in August and increased their  S&P 500 targets.

 Student loans, strikes and shutdowns are causing legitimate concerns in the market, but “we think it’s a positive thing because we think the markets’ pricing some of these things in,” Carson said.

“If we get any better news, like we think we will because the economy’s still on a good footing, (some doubt that’s come in) could be what’s necessary to push markets to new all-time highs,” he added.

In the most recent government shutdown, the S&P posted gains as the market took it in stride, Detrick noted. An with an election next year, a shutdown likely won’t last very long and markets expect it, he said. As for a strike by autoworkers, Detrick expects a resolution, given government involvement, and doesn’t see it causing a major disruption to the economy.

Pictured: Ryan Detrick