Pros:
1. The S&P 500 potentially rocketing 18% by year-end could result in significant returns for investors.
2. A strong economy often leads to increased corporate earnings, which can positively impact stock prices.
3. The end of interest rate hikes could make equities more attractive compared to fixed-income investments.
4. If Treasury yields are indeed normal at 5% based on historical standards, it may indicate stability in the bond market.
Cons:
1. There is no certainty that the S&P 500 will actually skyrocket by 18% by year-end, as market performance is influenced by numerous factors.
2. While a strong economy is generally favorable for stocks, unforeseen events could potentially impact growth projections.
3. The end of interest rate hikes might not guarantee a direct positive impact on the stock market, as other factors may come into play.
4. Comparing Treasury yields to historical standards does not provide a complete picture of economic conditions, as the financial landscape constantly evolves.
According to Oppenheimer’s chief market strategist, Treasury yields at 5% are considered normal when considering historical standards.
