The SPDR S&P 500 (NYSE:SPY) will surge 100% or more by 2022, according to one prominent equities analyst.
Zacks VP Kevin Matras recently penned a piece making his case for the massive rally:
In fact, the market only needs to gain on average of 14.9% per year in order to do so. That’s not such a stretch given the market has been averaging 14.9% per year since this bull market began in early 2009, even though GDP has only been increasing at an anemic 1.48% annual rate during that time.
My 5 year doubling thesis also means that we won’t see another recession until stocks double again, nor will we see another bear market until stocks double again.
The crux of Matras’ argument is the fact that the post-financial crisis recovery has been longer and slower than the traditional 5-year boom and bust cycle. As a result, he believes the new economic cycle will last 7 to 10 years.
He also notes that GDP growth has hovering around only 2% during the current market rally. If that growth soars, as many believe it will, that would be much bigger profits for S&P 500 companies. Add in the fact that interest rates will probably remain historically low for the foreseeable future, and conditions seem to be lining up for the bull market not only to continue, but to accelerate.
The SPDR S&P 500 ETF (NYSE:SPY) rose $0.24 (+0.10%) in premarket trading Monday. Year-to-date, SPY has gained 6.91%.
SPY currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 108 ETFs in the Large Cap Blend ETFs category.