Tags: Parker | S&P | 500 | rally

Morgan Stanley's Parker: S&P 500 Will Rise 50 Percent by 2020

By    |   Tuesday, 02 September 2014 09:32 PM

Many stock market participants say the party will continue even though the rally is five years old. Adam Parker, chief U.S. equity strategist for Morgan Stanley, is one of them.

He predicts the S&P 500 will hit 3,000 in 2020. That's a 50 percent increase from Monday's close of 2,002.28.

So why is the bull market that has seen the index almost triple since March 2009 going to continue?

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"If you don't see a lot of hubris, and you don't see a lot of debt, it's hard to call that top of the cycle," Parker told CNBC

Capital spending, hiring, inventory, debt and interest-coverage trends all bode well for stocks, he said.

"If you look at those issues, I think there's a lot of evidence that this could be a pretty prolonged [economic] expansion," Parker said.

"And if you just think that through, if you get kind of mid-single-digit [earnings] growth every year for the next several years, you can start getting a lot higher on the S&P."

As for the short term, while September represents the worst month for the Dow Jones Industrial Average in the last 100 years "by far," that doesn't mean a decline is coming this time around, says Mark Hulbert, editor the Hulbert Financial Digest.

That's partly because most September declines have come in years when stocks already were falling, which they aren't this year, he writes on MarketWatch. The Dow gained 3.1 percent in the first eight months of 2014.

When the index has suffered a loss in the year's first eight months over the past century, it followed with a drop in September more than two-thirds of the time.

But when the Dow has climbed in the first eight months, it enjoyed a gain in September as frequently as it suffered a decline.

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

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Many stock market participants say the party isn't over after a five-year rally. Adam Parker, chief U.S. equity strategist for Morgan Stanley, is one of them.
Parker, S&P, 500, rally
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2014-32-02
Tuesday, 02 September 2014 09:32 PM
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