Millennials are playing a vital role in Tony Dwyer's bullish case for stocks.

The Canacccord Genuity chief market strategist believes the demographic's robust spending is lowering recession risks.

"It's a really big deal," he told CNBC's "Trading Nation" on Monday. "The peak birth year in the millennials is almost as big as the peak birth year of the baby boom generation."

It puts the group at an age when many of them are embarking on the next chapter of their lives, according to Dwyer.

"That's 1990. They are turning 30. They've had 10 years to be in the workforce. They've had 10 years to build a credit score. They've had 10 years to meet a significant other and get prepared to build a household," he said "We're seeing this behavior show up in this millennial demographic which should help buffer the economy from a more significant slowdown."

Even though millennials are known to be a generation squeezed by student loans and credit card debt, Dwyer says they're comfortable being in spending mode.

"If a household is fully employed, they have income and they can go to the bank and get a home equity line of credit or credit card debt or whatever a bank is willing to lend them, you have some pretty consistent spending behavior as we've seen over the past 10 years," Dwyer said.

He suggests a strong jobs market with a historically low 3.5% unemployment rate is helping to create an accommodating environment that's supporting the consumer economy.

"The only way this works is if they're employed. We're at full employment with wages going up and have access to debt via bank lending or other financial institution lending," he said. "This is still wide open."

Dwyer, whose S&P 500 target is 3,350 by the end of 2020, has been particularly bullish on consumer discretionary stocks.

"The only thing that really matters in terms of a consumer spending pattern is how much money is available, and do you have a job," said Dwyer, who believes stocks are on the cusp of another historic run before the next recession does finally hit.

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