9/2/2014 – A mixed day with the Dow Jones down 31 points (-0.18%) and the Nasdaq up 18 points (0.40%).
While the S&P can barely hold on to its newly minted 2,000 level, it’s not good enough for Morgan Stanley. Here’s Why Morgan Stanley Says S&P 500 May Near 3,000 Their reasoning?
- The U.S. economy, which began recovering in July 2009, may continue growing for five years or more, making it the longest period of expansion.
- “Equities should benefit from a scenario where the probability of a cycle peak remains low for some time,” Adam Parker, chief U.S. equity strategist at Morgan Stanley, and economist Ellen Zentner wrote in the note. “As the prolonged expansion becomes more visible, we’d expect a materially higher U.S. stock market.”
- If earnings for S&P 500 companies increase about 6 percent every year from 2015 to 2020, profits will be close to $170 a share, Morgan Stanley said. Should the equity index trade at 17 times its companies’ reported earnings, its peak level could near 3,000, the bank said. The gauge currently trades at a multiple of 18 times, data compiled by Bloomberg show.
Very well. At least it is not your typical bull chest bumpers who claim that the Dow is going to 40,000 by the of 2015….no matter what. There is only one problem with the thesis above. Why would the US Economy grow at 6%? It is already pumped up on so much credit that that any more growth “stimulus” will OD the poor thing.
Plus, I keep outlining the cycles that clearly show that we are NOT in a secular bull market. In fact, a secular bear market of 2000-2017 is not even over yet. And 2009 was not the bottom. It was a mid-cycle bottom. Identical to those in 1908, 1937 and 1974. Finally, just because everything SEEMS alright, doesn’t mean that it will continue to be so.
I can give you a million examples, but I don’t have to go further than 2007 top. The US Economy was on fire on October 11th, 2007. And the bulls were hyping up the same nonsense you see above. Yet, the market simply topped out, turned around and headed lower. Erasing 50-60% of market’s value in 15 short months. It will not be different this time around.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. September 2nd, 2014 InvestWithAlex.com
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