S& P 500’ s strong start muddies year- end forecasts

‘ Wings under the bull market’ may push market even higher than the top predictions

Is the stock market running way ahead of itself? Or is the rally just getting started?

Just six weeks into 2017, a broad U. S. stock index is already trading above where more than half of 18 Wall Street strategists predicted it would finish the year.

But the large- company Standard & Poor’s 500 stock index is still trading well below where the biggest Wall Street bull says it will end 2017. Who’s right? The S& P 500, which briefly topped 2350 Wednesday, closed at a record high of 2349.25, stretching its 2017 gain to nearly 5%. The index has already eclipsed year- end forecasts of 10 Wall Street strategists polled by Bloomberg ranging from 2275 to 2350. But its ascent is still well below the most- bullish S& P 500 year- end prediction of 2500, which is nearly 6.5% higher than Wednesday’s peak. The average price target of 18 strategists polled is 2362, less than 1% above current levels.

Stock market strategists with the most optimistic and least optimistic 2017 outlooks interviewed by USA TODAY say the biggest risk to their forecasts is to the upside. Stocks could go even higher than their initial predictions, they say, bolstered by an improving economy, more profitable U. S. companies and hopes that the White House will finally take steps to jump start growth.

Indeed, Wall Street’s top two bulls, Jonathan Golub of RBC ( 2500 S& P 500 target) and John Stoltzfus of Oppenheimer ( 2450) both say they may be underestimating the bull market’s potential as it approaches its eighth birth- day in March.

Golub rejects the notion that stocks are moving higher solely on hopes that President Trump’s agenda will get passed and provide an economic boost.

“There’s been a real upturn in the underlying economy, ... and that’s the most important market driver,” says Golub.

If Trump delivers on his promise to pave the way for better business performance for U. S. companies, that would also be good for stocks.

“If Trump’s stimulus programs ... ( get enacted), it will help the economy and market,” Oppenheimer’s Stoltzfus says. “We think Trump’s election put wings under the bull market.”