The S&P 500 (NYSE:SPY) may be down nearly 3% since the start of August, but come October and November, the broad market index is going to break out to new highs, setting up the market for a strong start to 2024, according to Ryan Detrick.

What Happened: Detrick, chief market strategist at the Carson Group, told Benzinga's PreMarket Prep hosts Dennis Dick, Joel Elconin and Mitch Hoch on Tuesday that he believes the market had not yet seen its peak for the year.

Fundamentals Still Strong: “The F-word is okay, and that’s fundamentals,” Detrick quipped, noting that some sectors — especially traditional retail — face a tough season, while others such as Walmart Inc (NYSE:WMT) and Lowe’s Companies Inc (NYSE:LOW) have been posting impressive gains in online sales.

Despite the rough start to the third quarter, Detrick said earnings expectations have risen by 2% since the beginning of the earnings season. “What companies are saying about the future has been solid,” he added.

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If the credit markets remain stable, it gives further credence to the idea that the downturn seen in August is just a dip and "shaking out some of the weak hands," he said. The Carson Group strategist said he wouldn't be surprised if the fourth quarter was "pretty solid."

His outlook isn’t rosy across the board, though. Detrick said he is steering clear of more defensive areas like utilities and staples. “We have them in our models, but we’ve been underweight those sectors,” Detrick said.

Instead, the Carson Group is leaning more toward cyclical small caps.

Detrick’s insights paint a cautiously optimistic picture for the remainder of 2023. While he acknowledged the challenges faced by specific sectors, his overall perspective based on fundamentals, earnings expectations and credit market stability suggest the market is well-positioned for growth in the final quarter of the year.

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