The following is an excerpt from Lu Wang | November 24, 2017 | Bloomberg.com |
As Wall Street equity forecasters discharge their annual duty of predicting another up year for the S&P 500 Index, it’s worth taking a moment to notice what would be accomplished should that projection come true.
At 2,800, the average estimate of nine strategists tracked by Bloomberg points not only to another year of all-time highs, but also an extension of a bull market that would make it the longest ever recorded. Born in the depths of the financial crisis, the advance that started in March 2009 is nine months away from surpassing the 1990-2000 run from the dot-com era.
Wall Street prognosticators, whose penchant for bullishness always looks prescient when prices are rising, are sticking with what works amid a 285 percent surge in the S&P 500. Earnings are expanding at a double-digit pace, they say, the economy is strengthening across the globe with a consistency not seen in a decade, and tax cuts in the U.S. will add stimulus.
“It’s a sensible position because historically markets have risen in line with growth of the economy,” said Peter Jankovskis, co-chief investment officer of Lisle, Illinois-based Oakbrook Investments, which oversees $1.6 billion. “The logical forecast is for what just happened to continue and calling that turn is inherently difficult.”
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