He nailed three big S&P 500 moves this year. Here’s where this strategist sees stocks headed next, with beaten down names to buy.

Bierman, who uses quantitative and fundamental analysis to determine market direction, sees the S&P 500 SPX, +3.06% ending the year between 4,000 and 4,200, perhaps around 4,135. “Seasons in the fourth quarter favors bulls after a weak third quarter, not to mention the price of most stocks with no growth,” he told MarketWatch in a Monday interview.

In Dec 2021, he predicted the S&P 500 could see a 20% drop in six months, towards 3,900 – reaching 3,930 in early May. In June he has predict a rally and recover to 4,300 — the index reached 4,315 in mid-August.

Speak with MarketWatch on August 25Bierman saw a retest of about 3,600 for the index, citing an often rough September for stocks. It last month closed at a new low in 2022 of 3,585.

“I think we’re going to end before the quarter. [The market is] heavily oversold and some stocks are completely mispriced in terms of their valuation metrics,” said Bierman, who looks closely at the retail and technology sectors.

“The valuations of half of the chip stocks trade below a multiple of seven. I’ve never seen that before… but what that means is that when the semiconductor sector returns, the multiple expansion will be like a volcanic eruption upward,” he said of the industry known for its boom/bust cycles.

For example, he owns Intel INTC, +2.71%, which reached its lowest level in five years on Friday. Ultimately, the company that invested $20 billion in a new factory in the US will come back roaring alongside rivals like Advanced Micro AMD, +2.71%. “People will look back on this and say, ‘Oh my God, I can’t believe Intel had five times the profit,’ which is insane for this stock.”

In terms of retail, he looked at Urban Outfitters URBN, +7.13%, Macy’s M, +7.52% and Nordstrom JWN, +7.84%, all places where millennials don’t shop, but the middle class does, with the all-important shopping season ahead of the holiday season.

“There are 100,000 people being hired to work part-time with these companies, and their margins are not dropping at all,” he said, excluding markdowns and decent sales, noting that those companies are priced at a multiple of 5 times future profits.

“It means you think Macy’s can’t put together a comparative quarter, year over year, of more than 5% for the Christmas quarter? If you don’t buy it, don’t buy it, but I will,” Bierman said. “That’s why I’m willing to stick my neck out and buy these things. I bought Abercrombie & Fitch ANF, +3.06% at 10 times the profit…I’ve never seen it this low.”

For those not comfortable picking stocks, he says they can still gain exposure through exchange-traded funds, such as SPDR S&P Retail XRT, +4.60% or the Technology Select Sector SPDR ETF XLK, +3.36%.

Bierman adds that investors should be careful not to be too concentrated in the top stocks, given that “10 stocks accounted for 45% of the Nasdaq and the fact that 25% of the S&P accounted for nearly 50% of the S&P movement. .”

“Everyone is concentrated in 10 stocks that could fall another 30% or 40%, like Apple and Microsoft. The idea of ​​concentration risk is that everyone owns Apple, everyone owns Amazon,” he said.

And that could force the hand of passive and active managers who have invested heavily in those big names, causing a 10% drop for markets that “washes out all other stocks.”

the markets

Stock futures ES00, -0.89% YM00, -0.89% NQ00, -0.86% have fallen, and bond yields TMUBMUSD10Y, 3.699% TMUBMUSD02Y, 4.141% have risen along with the dollar DXYN, -6.43%. Silver SI00, -3.62% follows some of this week’s big gains, and bitcoin BTCUSD, -1.61% has fallen just over $20,000. Hong Kong shares HSI, +5.90% rose 6% catching up after a holiday. New Zealand Central Bank increased rates half a pointthe fifth increase in a row.

the buzz

Oil prices CL.1, -0.38% BRN00, -0.31% are softer forward calls for a major production cut by OPEC +, with a decision expected at 8 p.m. Eastern. Some say you shouldn’t be impressed by anyone output reduction.

Amazon AMZN, +4.50% shall reportedly freezing company hiring in retail for the remainder of 2022.

The ADP Private Sector Payroll Report is expected at 8:15 a.m. Eastern, followed by the International Trade Balance Sheet at 8:30 a.m. and the Institute for Supply Management Services Index at 10:00 a.m. Atlanta Fed President Raphael Bostic will also speak.

Expect the spotlight on Twitter to remain TWTR, +22.24% after Tesla TSLA, +2.90% CEO Elon Musk committed to the $44 billion deal. But will it feel like a win? once he has it?

South Korea’s missile fired in response to North Korea’s weapons launch over Japan, crashed and burned.

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The CEO of an election software company has been arrested on charges of identity theft.

Top tickers

These were the most searched for tickers on MarketWatch as of 6 a.m. Eastern:

The graph

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