Wall Street analyst suggests US stocks set for decade of growth.
The Wall Street analyst Tom Lee has said that he expects the US stock market to continue riding high for another 11 years. Lee’s prediction is based on the analysis of economic data which suggests the US economy is in the middle of the global business cycle.
Speaking to CNBC, Lee, who is head of research at Fundstrat Global Advisors, said: “Both [Fundstrat technical strategist Rob Sluymer and I] think it’s more like 2029 is the peak of this equity market cycle and then, the S&P is 6,000 to 15,000, so I think it’s just important to be long-term oriented right now.”
Lee also believes that the US stock market will be boosted by trends in the bond markets. Negative bond yields will help to encourage investors to move money away from bonds and into stocks.
S&P Price Target
Lee has set a year-end target for the S&P 500 of 3,025. The S&P 500 has enjoyed a period of growth in recent months, with trading close to reaching all-time highs and the second-longest bull market on record.
Lee’s target represents an increase of approximately 8 percent on Friday’s mark, and is one of the higher estimates compared to other market analysts. He said: “we’ve had so much caution since ’09 that animal spirits have been depressed… last year, 2017, was probably the first time in nine years that I thought institutions were actually bullish.”
Track Record
Lee’s analysis runs counter to many other commentators, who have offered less positive prognoses for the coming year, anticipating a rise in bond yields, not a decline. But Lee is an analyst who has demonstrated a good track record of making the right calls over the last 18 months.
Lee was one of the few Wall Street pundits to correctly predict that a Trump victory in the 2016 US presidential election would lead to a stock market rally, and not a sell-off. Lee has also been extremely positive in his assessment of Bitcoin’s future, forecasting the cryptocurrency to hit a value of $25,000 by the end of 2018 and $125,000 by 2022.