Daiwa Securities: S&P 500 index is expected to reach 7200 points by mid-next year.

Morgan Stanley strategist Michael Wilson believes that with the support of blue chip profits and positive macro trends, there is a chance for the S&P 500 index to rise to 7200 points by the middle of next year, representing a 12.5% increase from the current level. Wilson stated in a securities analysis report that the target of 7200 points for the S&P 500 index is an optimistic forecast, mainly based on the expectation that the total earnings per share of the index's components will reach $319, with an estimated price-to-earnings ratio of 22.5, hence reaching the target. Wilson believes that the quarterly earnings reports of the S&P 500 index components show a stable foundation for corporate profit growth, with an average expected growth rate ranging from 10% to 20%. Wilson characterized the current stock market cycle as non-traditional, mainly supported by factors such as positive operating leverage ratio, application of artificial intelligence, weak US dollar exchange rates, tax savings, good income growth, continuous demand increase, and the Fed's plan to cut interest rates. He is confident that the index will trend towards meeting the optimistic forecast mentioned above, and recommends investing in high-quality stocks while the market is low. As for individual industries, Wilson maintains his previous view, believing that industrial stocks will be one of the most beneficial sectors in this upcoming market upturn.