- Veteran strategist Jeff Saut thinks the S&P 500 could rocket more than 25% to 4,000 in the next 12 months.
- He told CNBC’s “Squawk Box” on Monday: “You’re going to get a rocket ship coming in the fall. I think the S&P is going to trade out above 4,000.”
- Saut said he thinks the economy is doing better than most economists think, pointing to high attendance at restaurants as one reason for his optimism.
- The S&P 500 has already rallied over 40% since touching coronavirus lows of 2137.40 in March.
- Visit Business Insider’s homepage for more stories.
As coronavirus cases continue to spike and markets face an uncertain few months ahead of the presidential election, veteran strategist Jeff Saut says he still expects stocks to keep rising, and is banking on the S&P 500 to bounce more than 25% in the coming year.
He told CNBC’s “Squawk Box” Monday: “We may stall here for a while into the fall, … but I think you’re going to get a rocket ship coming in the fall. I think the S&P is going to trade out above 4,000.”
The S&P 500 is currently trading just shy of 3,200, meaning Saut is betting on an increase of more than 25% in the index over the next 12 months.
Asked why he still thinks the US is on course for a V-shaped recovery despite rising US coronavirus cases and sky high unemployment, he pointed to the fact that restaurants are full and said the “economy is doing better than economists think.”
He added: “People are [woefully] under invested, there is $5 trillion in money market funds. I think the markets are going up. I think they are going up a lot more than people think.”
While he thinks there is a possibility the S&P 500 may “stall” into the fall, he thinks it will have breached 4,000 in a maximum of 12 months.
The S&P 500 has rallied about 40% since touching recent lows in March when the coronavirus first started spreading quickly in the US.
But many commentators have warned of a fresh plunge given much of the market’s rise took place before a resurgence in coronavirus cases.
Christopher Barraud, who is often cited as the most accurate economist when it comes to forecasting the US economy, told Business Insider: “It will take a long time for life to return to normal. Even if there is a vaccine by the end of the year, it likely wouldn’t be distributed until 2021, leaving a long time for the US to grapple with the virus.
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