Wall Street institutional investors are increasingly optimistic about the stock market.
Evercore ISI expects the Standard & Poor’s (S&P) 500 index to reach 6000 by the end of this year. They also forecast it will reach 7000 by the end of next year.
Goldman Sachs also expects it to hit 5700 by the end of this year.
On June 17, all three major indices of the New York Stock Exchange rose simultaneously, with the S&P 500 and Nasdaq indices once again setting new record highs.
NASDAQ set a new record for the first time in six days based on trading days, and the S&P 500 broke its record for five days excluding 14 days.
Julian Emanuel, a market strategist at Evercore ISI, predicted in an analysis note that the S&P 500 would reach 6000 by the end of this year, significantly raising the previous target of 4750.
This is the highest target among Wall Street institutional investors.
David Kostin, Head of Stock Strategy at Goldman Sachs, also raised the year-end target for the S&P 500 from 5200 to 5600.
The upward revision of the stock market outlook by institutional investors such as Evercore and Goldman Sachs is due to solid earnings reports.
Emanuel was optimistic that the earnings per share (EPS) of companies included in the S&P 500 will grow by 8% this year and 5% next year if their net profits are solid.
He assessed the current situation as a Goldilocks scenario where conditions are neither too hot nor too cold, but just right for a sustained upward trend.
Emanuel evaluated that inflation is slowing down, the Federal Reserve is showing a willingness to cut interest rates, and the economic growth rate is maintaining a solid trend.
Ultimately, he expected that the stock market would continue to show a stable trend through these three bridges, creating a Goldilocks situation.
Emanuel also cited productivity improvements due to artificial intelligence (AI) as another basis for his optimistic market outlook.
He was optimistic that the potential for productivity of generative AI is affecting all jobs and industrial sectors, and that high valuations can be sustained for a longer period due to the productivity improvement from AI.
