Meric Greenbaum, Designated Market Maker IMC financial looks up at the board before the opening bell right before trading halted on the New York Stock Exchange on March 9, 2020 in New York.

The S&P 500 entered a bear market on March 12 — bringing the longest-ever bull expansion to an abrupt end — as the fast spread of the coronavirus and resulting shutdowns soured economic and profit growth forecasts around the world. However, after the relentless selling wave, Lakos-Bujas now sees a chance for stocks to return to record levels.

Dubravko Lakos-Bujas wrote in a note to clients he expects the S&P 500 to reach 3,400 in early 2021. That would top an all-time high of 3,386 set on Feb. 19. It is also 47% higher than the broad market average's Friday close of 2,304.92.

The S&P 500 could return to record highs by early next year if U.S. efforts to contain the coronavirus outbreak work and the government can quickly move forward with fiscal stimulus to cushion the impending economic blow, JPMorgan's chief U.S. equity strategist said Friday.

"Acknowledging that equity markets globally are now down 30-50% from their recent highs, and that investor positioning has become increasingly favorable, we see an asymmetrical return profile for equities with upside significantly higher than downside over the next year," Lakos-Bujas wrote.

For his scenario to play out, though, the U.S. government must pass a "comprehensive fiscal package promptly."

The White House is currently seeking more than $1 trillion in government stimulus to soften the virus' economic hit. Treasury Secretary Steven Mnuchin said Thursday the administration wants to send direct payments to U.S. kids and adults as part of that package. Those payments would total about $500 billion. Several industry groups — particularly airlines — are also seeking relief money.

"Aggressive fiscal policy needs to be undertaken immediately," Lakos-Bujas said, noting that failure to pass such measures "would likely result in a broader capitulation of equities including the heavyweight momentum stocks."

The other side of the equation is curbing the coronavirus spread in the U.S. More than 15,000 cases have been confirmed in the U.S. along with over 200 deaths, according to data from Johns Hopkins University.

Authorities in the U.S. have imposed measures to contain the number of cases and "flatten the curve," which would keep the country's health care system from being overrun by the outbreak.

"The spread of the outbreak in the US will still remain a key concern," the strategist said. "At the same time, there are early signs of progress being made of potential anti-viral treatment, though the outcome is still uncertain."

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