‘Tis the season for buying opportunities, Wall Street bull Jeff Saut told CNBC on Monday. And he wasn’t talking about Cyber Monday deals.
“I think you’re getting an early Christmas gift with this sell-off right here on Friday and today,” Saut said.
All three major market indexes fell on Friday’s shortened trading session, each dropping around .4%, and they continued their declines Monday, the first trading day of December. Investors were responding to less-than-stellar news in the U.S.-China trade negotiations and disappointing manufacturing data.
Historically, December has been the strongest trading month of the year, but last year the S&P 500 sank more than 9% during the final month. But the market has pieced together a 2019 rally, with the S&P up around 24% year to date. The Dow is up almost 20%.
Saut said he believes the sell-off may continue into the middle of the week, but that does not shift his overall attitude toward the market. Despite the weak manufacturing reading, Saut said he thinks better-than-expected retail sales can propel the market higher in December.
Saut has some company with his final-month optimism. CNBC’s Jim Cramer, for example, also said he doesn’t think the stock market will drop in December like it did in 2018.
“Nothing worries me in the sense of looking for a big sell-off in December,” Cramer said Monday on “Squawk on the Street.”
Saut added that he believes the market can continue to rise in December, even if a phase-one trade deal between the U.S. and China is not struck. In fact, he said he doesn’t think there will be a deal by the end of the year, arguing the talks have “hit a stall” due to President Donald Trump signing laws in support of the Hong Kong protesters.
The former chief investment strategist at Raymond James said there were a few sectors that stand out to him as strong buying opportunities for short-term investors: technology, energy stocks and financial.
“I think financials are cheap,” said Saut, who added he believes small-cap stocks also have room to run.
“I think the small caps are getting a January effect in December,” he said.