Fund manager Marc Faber, known as Dr. Doom for his generally grim market calls, has turned bullish on stocks—in the short term in any case.
“The market in February became extremely oversold, and from this extremely oversold position, we can have a relatively strong rally,” said Faber in an interview with CNBC on Wednesday.
Faber notes that the so-called momentum stocks, which have outperformed the market in 2015, are likely to rebound in the wake of a massive selloff earlier this year while the oil sector could also recover by 10% to 20%.
The combined impetus from oversold momentum shares and oil could propel the S&P 500 to around 2,050 but not to new highs, he said.
“If new highs happen, they will happen with very few stocks participating,” Faber told CNBC.
But Faber, who describes himself as a “congenital contrarian,” thinks any bounce back will be brief with stock markets around the world once again retreating given the general slowdown in the global economy. That will likely drag on the U.S. as it cannot remain immune to weak overseas markets.
U.S. stocks are moderately lower on Wednesday after the S&P 500 kicked off a new month with an emphatic start on Tuesday.
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