Last week, we raised our year-end S&P 500 target from 8,250 to 8,400. We are sticking with our 10,000 target by the end of the decade, though we might raise it. Our Roaring 2020s scenario is delivering even better S&P 500 earnings than we expected. FEMO (fabulous earnings momentum) is driving the stock market higher!
The S&P 500 is up 141.0% so far this decade, making it the sixth-best decade since the Roaring 1920s already (chart). If it rises to 10,000 by the end of the decade, it will be up 209.5%, the fifth-best decade. In other words, roaring decades are not exceptional for the stock market. (The S&P 500 fell during the 1930s and 2000s, and edged up slightly during the 1940s, 1960s, and 2000s.)
To reach 10,000 by the end of the decade requires an additional 28.5% (or 2,201 points) gain in the S&P 500. That's roughly 7.5%-8.0% annualized price growth over the remaining 3.4 years of the decade.
If the S&P 500 hits 8,400 by the end of this year, that would make 2026 the fourth consecutive year of 15% or more annual gains (chart). The only previous streak of five consecutive gains occurred during the second half of the 1990s.
Let’s look a bit deeper: