U. S. stocks fell sharply on Monday, with the Dow down more than 700 points, its biggest one-day drop since October. But Art Hogan, longtime bullish on Wall Street and chief market strategist at National Securities, believes such wild swings will lay the groundwork for a sharp rebound and prompt him to raise his year-end target for the S & P 500.

Speaking of the sharp fall in US stocks, Hogan said: "this is just a light spot on the radar screen." He believes that a decline of 5% to 10% is under way. But he stressed that this was to be expected. "We fall by an average of 5% a year. Usually we have a 10% drop every year. "

In this environment, he encourages long-term investors to choose equally weighted growth and cyclical stocks. His strategy can be traced back to the early days of the outbreak.

"if you adjust every two months to keep the barbell level, I think you will outperform the S & P 500," he said. "

In terms of growth stocks, Hogan is bullish on stocks in areas such as 5G, cloud security and cloud computing. In terms of cyclical stocks, he is bullish on financial, energy, industrial and materials stocks.

Hogan, who manages $20 billion in assets, acknowledges that COVID-19 's risk is increasing. But he does not think this will mean extreme restrictions and a significant slowdown in economic growth. " "the current epidemic is likely to peak and we will refocus on what we should focus on, such as a substantial increase in profits," he said. "

Hogan expects the ongoing second-quarter earnings season to significantly exceed Wall Street expectations. If so, he would raise the S & P; target to 4400 by the end of the year, up 3 per cent from Monday's close.

"there is a lot of room for upside in this market," Hogan said. Volatility is part of this process. Remember, this is an economy that is just beginning to reopen, and consumers are just starting to get back to activity. "