Morgan Stanley: S&P 500 index targets 7,200 points by mid-next year

Odaily Planet Daily News: Morgan Stanley strategist Michael Wilson believes that with the support of blue chip earnings and positive macro trends, the S&P 500 index has a chance to rise to 7,200 points by the middle of next year, which is 12.5% higher than the current level. Wilson said in a securities analysis report that the S&P 500 index of 7,200 points is a more optimistic forecast, mainly because the total earnings per share of the S&P 500 index components are expected to reach 319 yuan, and the expected price-earnings ratio is set at 22.5 times, so the S&P index is expected to reach the target. Wilson believes that the quarterly results released by the S&P 500 index components show that corporate earnings growth has a stable foundation, and the average increase is expected to be in the middle of 10% to 20%. Wilson described the current stock market cycle as a non-traditional cycle, mainly supported by factors such as positive operating leverage ratios, artificial intelligence applications, weak US dollar exchange rates, tax savings, good income growth, continued demand growth, and the Federal Reserve's interest rate cuts. He is confident that the S&P 500 will tend to meet the above optimistic forecast and recommends buying high-quality stocks at low prices. As for individual industries, Wilson maintains his original view and believes that industrial stocks will be one of the biggest beneficiaries of this market rally.