In a presentation to clients on Tuesday, he outlined how millennials are set to fuel a decade-long bull market in stocks as America's most populous generation enters its peak earning years and begins to form families.
"The biggest reason to stay bullish is because of millennials," Lee explained, noting that stocks boomed when Baby Boomers and Generation X entered the age range of 30 to 50 years old.
He said the S&P 500 could surge to 19,349 by 2029, representing potential upside of 313% from current levels. A surge to that level would translate to a compounded annual growth rate of 20%, well above the stock market's historic average of between 7% and 10%.
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Supporting Lee's bull thesis is the fact that many mega-cap companies today were founded by business leaders who were in their 30's at the time, including Costco, Home Depot, Cisco, and Oracle, among others. Additionally, US patent issuances tend to spike when the US sees a surge in its population of 30 to 50 year olds, indicating that innovation is strong.
The millennial generation overtook Baby Boomers in population size around 2015, and the most populous age in America right now is about 31 years old.
Lee follows demographics because they tend to serve as a leading indicator in identifying potential tops and bottoms in the stock market. He noted the number of adults between the age of 30 and 50 years old fell until 2008, as the Great Recession took hold. That age group is set to accelerate until 2026, and the number of millennials in that range won't decelerate until the early 2030's, according to Lee.
"Demographics of the US are turning into a tailwind right now...so we have this 14-year window ahead of us where we have a demographic tailwind...if this plays out we still have a very strong bull market ahead," he said.
The Roaring Twenties: This bull market, which took place in the 1920s, was fueled by speculation and lasted until the stock market crash of 1929. It was characterized by rapid economic growth, rising asset prices, and increased consumer spending.
One of Wall Street's biggest bulls is telling clients that he may have underestimated how much higher stocks can climb in 2024. Tom Lee, chief strategist at Fundstrat, said his current year-end target for the S&P 500 to finish 2024 at 5,200 might be too low, given how much higher the index has climbed in January.
In an interview with CNBC, Lee said that Bitcoin will "make a bee-line back towards its long-term trend line," which could propel it to $150,000 before year end...and much much higher numbers in the future."
There are several things that tend to accompany a bull market. For starters, they generally happen during periods when the economy is strong or strengthening. Bull markets are often accompanied by gross domestic product (GDP) growth and falling unemployment, and companies' profits will be on the rise.
With stock indexes at all-time highs, it seems we are in the midst of a new bull market. While much of the market's recent gains have come from a handful of stocks, the rally has begun to broaden in recent months. Expectations of an earnings rebound in 2024 suggest earnings could continue to drive the market higher.
Stock market crash: Rising US dollar and Treasury yields, disappointing US retail sales data, falling Indian National Rupee (INR), and rising crude oil prices are some other reasons that have fueled the selling pressure in the Indian stock market.
In a bull market, there is strong demand and weak supply for securities. In other words, many investors wish to buy securities but few are willing to sell them. As a result, share prices will rise as investors compete to obtain available equity.
Investor.gov defines a bull market as “a time when stock prices are rising and market sentiment is optimistic. Generally, a bull market occurs when there is a rise of 20% or more in a broad market index over at least a two-month period.”
The largest percentage gainers for bull markets is the October 1990 bull market that generates a 417% return off the lows and the March 2009 bull market that triggered after the financial markets meltdown and housing bubble.
Introduction: My name is Kimberely Baumbach CPA, I am a gorgeous, bright, charming, encouraging, zealous, lively, good person who loves writing and wants to share my knowledge and understanding with you.
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