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One of Wall Street's most bullish forecasters has a bold new call for the stock market
(Bloomberg TV)
Laszlo Birinyi thinks the S&P 500 can hit 3,200 by 2017.
That would be a 52% jump from where the benchmark index was trading on Tuesday afternoon.
In an interview with CNBC on Tuesday, Laszlo Birinyi of Birinyi Associates said:
"Most people don't realize that we are now in the second greatest S&P rally in history, and we are actually ahead of the 1990 rally. And if the market continues to gain 11 basis points a day as it has for the last six years, two years out or so, we're going to be over 3,000. So it's more a matter of guidance. What we're really trying to tell people is stay with it. Don't let the bad news shake you out. We've heard all the bad news before ... there's no reason why we can't keep on going."
Birinyi said that all the recent, unsettling news about China's slowing economy and stock market crash, and Europe's economic troubles, are "noise" as far as the US stock market is concerned.
And if your argument for a looming market crash is that stocks are overvalued, Birinyi recalls that strategists said the same thing in 1991 when the price-earnings ratio on the S&P 500 was 18x earnings. (It's now about 21x.)
That didn't stop the bull market for almost another decade.
On Tuesday afternoon, stocks were slightly lower on the day while the S&P 500 was near 2090.60.
The index's closing record of 2,130.82 was hit on May 21.
Here's what the current bull market looks like:
(FRED)
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