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Morgan Stanley recently said that the market could easily rally for several more years until the S&P 500 hits a peak of 3,000.
Their argument is based on the premise that this economic recovery is much different from prior ones. We were much weaker to begin with and we embarked immediately after the stock market collapse with a commitment to deleverage like never before. What's more, the global recovery is still way too uneven at the moment. It needs time to continue to grow.
Their short version: This recovery could go on for six more years with 50% upside left in the S&P between now and then. If that plays out, from trough to peak, it will be a 12-year economic recovery.
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As unbelievable as it seems, I think these economists are going to be proven dead right and maybe a little conservative in hindsight. Despite the massive efforts by central banks to increase the money supply and get people to spend again, it just hasn't happened.
There was a headline on CNBC the other day saying that most consumers are still hoarding money despite still so much of it floating around. This deleveraging bent is unusual in our modern history. It probably has to reverse before we get close to the end.