Analysts at JPMorgan Chase & Co. said Wednesday the market is poised for a record-setting earnings boost this year and is likely to be the biggest annual boost in three decades.
Investors are still trying to wrap their heads around the economic slowdown and the ongoing regulatory fallout that could impact the economy in the years ahead.
They are hoping the stock market surge will spur other companies to expand their markets, including real estate and manufacturing.
Wall Street has been looking for a bounce in the S&P 500 index, which measures the broadest measure of a company’s fortunes, to support the recovery.
The S&P 500 is up about 9 percent since December, according to FactSet data.
Analysts at the firm believe the S &Ps rally will continue in the second half of next year.
If they do, the S.&)P will be the highest since 2001, when it rose above 19,000.
That would be the largest annual gain since then, and would surpass the previous high set in 2000, when the S-plus index was up more than 20 percent.
JPMorgan is tracking the S+P 500 for about four years.
While it is likely the S;P will continue to rise, investors may be looking to other indexes to see how well the S®P 500 will perform.
We think the S/P will likely be higher than 20,000 by the end of next calendar year, and it may be at that level by 2019, the analysts said in a note.
“In terms of longer-term earnings potential, we are looking for an annual return of 5 percent or higher,” the analysts wrote.
To put that into perspective, the average S&p 500 return in recent decades has been 3.4 percent, according the Bloomberg Index.