I’m calling it now: Stock indices will hit massive new highs by the end of 2028. I predict that the SPX 500 will get to 10,000, the Dow Industrials will get to 70,000.Seems like a stretch, right? Well, when you think about it, the indices only need to average about 13-15% in gains each year through 2028. That might seem to be a high bar to meet considering the strong years in 2023 and 2024. But if certain things fall in place, and I can see that happening, the flight path towards those high numbers are very achievable.
How the stock indices will achieve this level of growth
A new business-friendly administration is taking control, and many CEO’s realize the time is now to get in alignment with policies that will help their businesses grow. The economy has been very strong over the past four years. Wages have grown significantly and job growth has been robust.However, the strong showing has caused high inflation and stymied the Federal Reserve. They set interest rate policy based on their goals of achieving price stability and full employment. By raising interest rates, they sought to tamp down inflation. It is coming down gradually but remains rather sticky. The Fed Open Market Committee will be taking a slower approach towards cutting rates. As long as prices start coming down, as we have seen recently, a looser monetary policy is going to drive the economy even higher.The new administration is likely to unhook very costly regulations that have strangled some business growth, especially in the financial sector. Banks have been complaining for years about restrictions. If they can break free, lending should increase. Technology and energy companies have also complained about tight regulations, so we could see better pricing from those sectors.Of course, the future is uncertain, and we could hit bumps along the way. Hopefully we will not experience another pandemic that threatens the world economy (bird flu is of concern). Earnings have been solid for the past few years and if that continues, stock investors will continue to plow money into the stock market and drive prices higher. Don’t be surprised if the 10K and 50K party hats are being passed around in 2028!More By This Author:Market Blast – Friday, Jan. 17
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