Jupiter, Florida, December 30, 2019. The founder and CEO of GorillaTrades, Ken Berman, who has gone by the moniker ‘the Gorilla” for two decades, is predicting that the S&P 500 index will breach 3500 in 2020.
During the last two years, the Gorilla’s forecasts have been prescient. Back in 2017, he predicted the Dow Jones Industrial Average would break the 24,000 level by 2019. In December of 2018 amid a 17% correction, Berman forecast the S&P 500 would reach new all-time highs in 2019.
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The Gorilla’s 2020 forecast of 3500 is just behind the Street high forecast of 3,600 in a survey of major brokerages and institutional investors. Commenting on the forecast, the Gorilla noted:
2020 outlook for the S&P 500: 3500 & beyond
- Wildly bullish technicals predict a major rally following two years of consolidation, with a base-case target above 3500 in the S&P 500
- The volatile pullbacks this year together with the widespread recessionary fears provide a “Wall of Worry” for the rally to feed on
- The global economy is sluggish, but the U.S. growth remained stable and election years in the U.S. are usually bullish
- Markets have the support of central banks with the Fed and the majority of the global central banks already being in easing cycles
- Besides the monetary stimulus, further fiscal measures in the U.S. are expected ahead of the election, and Europe might also resort to massive fiscal stimulus
- While valuations are rich by historic measures, interest rates are lower than ever in modern history, and the cheap funding will continue to boost stocks through buybacks
- Corporate earnings remained resilient in the face of the global gloom. Further, since balance sheets are still healthy, even a small uptick in economic activity could result in significant earnings growth.
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