FYI: The S&P 500 is up a whopping 200% from its March 2009 low. At 2,003, the S&P has already exceeded many analysts' forecasts.
Morgan Stanley strategist Adam Parker and economist Ellen Zentner believe that the conditions are just right for the bull market to keep going for years.
"Our best guess is that an S&P 500 peak of near 3000 is possible should the U.S. expansion prove to have five or more years left to it, based on 6% per annum EPS growth through that time frame and a 17x price-to-earnings ratio," Parker writes.
Regards,
Ted
http://www.businessinsider.com/morgan-stanley-sp-500-3000-2014-9
Comments
Perhaps not acting on either prediction is best.
"Obviously, there's no guarantee that we're looking at five years of smooth sailing."
"There are a number of ways the current expansion could get derailed," Parker writes. "Europe and China are already slowing and near recession in some parts. Japan is highly dependent on the success of policy. U.S. reforms on key issues like the budget, taxes and entitlements, and immigration seem a long way off and are likely to cause much angst in the coming years. And after a prolonged period of unprecedented monetary policy accommodation, we are on the cusp of removal of that accommodation — also in an unprecedented way."
"But their base case remains quite bullish."
"As the prolonged expansion becomes more visible, we'd expect a materially higher U.S. stock market."
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And they didn't mention Russia......Ukraine.......What China wants to do to Hong Kong elections.......Iraq.......Syria........the whole Middle East.
Yeah, S&P 3000 could happen in this cycle, but there are a lot of risks
I know they use formulas and extrapolations to come up with this stuff but in the end it comes across as guess work. They seem very optimistic versus all the doom and gloom that has been pushed across the media as of late.
Aggressive central bank accommodation from Europe to Japan and a dovish Federal Reserve bode well for equities and bond prices.
Global CIO Commentary by Scott Minerd Guggenheim Partners
Back at home, we expect the Fed’s band will keep playing its merry tune for now. The voting members of the Federal Open Market Committee in 2015 will be even more dovish than the current committee. If there is a risk, it is that the Fed will keep monetary policy at a high level of accommodation for longer than previously anticipated.
Financial markets heard the sweet song of easy money from Jackson Hole loud and clear, sending equities up strongly while driving U.S. Treasuries’ prices higher and yields lower. The recent high of the New York Stock Exchange Advance-Decline Line supports this optimistic hypothesis, suggesting that stock prices will continue to reach new highs.
http://guggenheimpartners.com/perspectives/macroview/central-banks-pump-up-the-volume?