The S & P 500 index is targeting 7,200 points in the middle of next year

Michael Wilson, strategist at Morgan Stanley, believes that the S & P 500 index has a chance to rise to 7,200 points by the middle of next year, or 12.5% upside from current levels, supported by blue-chip earnings and positive macro trends. Wilson said in his securities analysis report that the S & P 500 index 7200 points is a more optimistic forecast, mainly because the total earnings per share of the S & P 500 constituents are expected to reach 319 yuan, and the expected price-to-earnings ratio is set at 22.5 times, so the target is expected to be optimistic. Wilson believes that the quarterly results released by the constituents of the S & P 500 index show that corporate earnings growth has a stable foundation, and the average growth rate is expected to be in the middle of 10% to 20%. Wilson described the current stock market cycle as unconventional, supported by positive operating leverage, artificial intelligence applications, a weak dollar, tax savings, good revenue growth, rising demand and interest rate cuts from the Federal Reserve. He is confident that the index will tend to conform to the above optimistic forecast and recommends buying high-quality stocks while they are low. As for individual sectors, Wilson maintained his original view and believes that industrial stocks will be one of the most beneficiaries of this increase.