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Stocks Running Higher But Earnings Better Come Along for Ride

The market could rise as much as three percent higher, but if earnings do not rise to support those levels then stocks could see a meaningful correction.

After bouncing back strongly from the Brexit selloff, the S&P 500 is up over six percent thus far in 2016. Jimmy Lee, CEO of the Wealth Consulting Group, sees the index rising as much as three percent higher to 2,240 before the end of the year. That said, if earnings do not rise to support those levels, he said the market could see a correction, and a 'meaningful one' at that. 'We have not had a bear market since 2009 so I wouldn't be surprised if we saw a shock at those levels,' said Lee. 'I'd keep cash on hand to buy into this if it happens.' In the meantime, Lee said owning defensive sectors like consumer staples continues to be 'a smart move'. The consumer staples sector is up around eight percent thus far in 2016, primarily due to its healthy dividend yield. He is also positive on the multi-family housing sector as a demographics play on baby boomers downsizing, the workforce having to rent, and millennials still drowning in debt.