• Canaccord's Dwyer says stabilization in oil, high-yield needed
  • Lowers prediction for S&P 500 in 2016 from 2,360 to 2,175

The wave of cuts to Wall Street stock strategists’ optimistic predictions has reached the biggest bull.

Canaccord Genuity Inc.’s Tony Dwyer, who began 2016 projecting the Standard & Poor’s 500 Index will reach 2,360, said collapsing oil prices and a rout in high-yield bonds now make it more likely the benchmark gauge will end the year at 2,175, or 7.8 percent below his original projection.

Dwyer’s new forecast implies the S&P 500 will rally 14 percent this year from its current level at around 1,912. His target is in line with the average estimate of 2,173 by 20 strategists surveyed by Bloomberg.

“You just have to go with the math,” Dwyer, who has been bullish on stocks for six years, said by phone. “Our estimate was built when oil was $49 and earnings were looking like $119 in 2015. You need time to rebuild confidence in high yield, foreign currency markets and equity markets.”

A 5.1 percent rout in the S&P 500 in January is forcing analysts to revisit their projections. Dwyer is the sixth strategist followed by Bloomberg to reduce their 2016 target price estimate. Most recently, Credit Suisse Group AG’s Andrew Garthwaite lowered his forecast by 4.7 percent, and JPMorgan Chase & Co.’s Dubravko Lakos-Bujas cut his estimate to 2,000, the lowest among those surveyed.

Stocks rose Wednesday, halting a two-day losing streak, as the S&P 500 erased losses from earlier in the trading day. Investors are weighing earnings results amid concern that weakness in the global economy is spreading.

Declines in commodity prices and its effect on the U.S. economy will weigh on corporate earnings in 2016, Dwyer wrote in a note to clients on Wednesday. Earnings per share in the S&P 500 will come to $121 a share in 2016, compared with an earlier estimate of $124, he said.

“The turning point will be when you stabilize oil prices, which will help stabilize bonds,” Dwyer said by phone. “I am still bullish but there are times when it has to be tempered.”

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