“The Dow Jones Industrial Average has surged 6 percent so far this year, and Thomas Lee, chief U.S. equity strategist for JPMorgan Chase, says the party can keep going for a long time.
He predicts to CNBC that the Dow may hit 20,000 within four years, and the Standard & Poor’s 500 Index 2,400 to 2,500.
That would represent a 44 percent gain for the Dow and as much as a 67 percent increase for the S&P 500.
Lee is impressed with the market’s ability to hit five-year highs, despite the reluctant participation of individual investors.
“There are a lot of reasons investors are sort of fighting the tape,” he says. “There are still a lot of memories of ’08 [the financial crisis]. We still have a taint on owning stocks.”
However, crucial statistics argue for a continuation of the stock rally, Lee says. First, S&P 500 earnings now total about $100 a share. But, “the [historical] cycle peak in earnings is closer to $150.” …”
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