A Wall Street sign hangs in front of American flags outside the New York Stock Exchange in New York, U.S. (Photographer: Victor J. Blue/Bloomberg)

Wall Street Rushing to Raise S&P 500 Forecasts Heading Into 2018

(Bloomberg) -- Two more Wall Street strategists bumped up their 2018 forecasts for the S&P 500 just days before the new year starts.

Jonathan Golub of Credit Suisse Group AG now predicts that the benchmark index will end next year at 3,000, up from a previous target of 2,875. Wells Fargo & Co.’s Chris Harvey boosted his projection to 2,863 from 2,784.

Wall Street Rushing to Raise S&P 500 Forecasts Heading Into 2018

Strategists are upgrading their market outlooks after Republicans passed the tax overhaul, spurring optimism that corporate earnings may get a boost from lower rates as soon as next year. Earlier this week, Citigroup Inc.’s Tobias Levkovich and Tony Dwyer of Canaccord Genuity lifted their targets to 2,800 and 3,100, respectively.

A reduction in corporate tax rate “is coming sooner than we had anticipated,” Harvey wrote in a note to clients. “Many see this action as a panacea that will spur economic growth, earnings growth and make you taller as well as providing a host of other benefits.”

Harvey increased the 2018 estimate for per-share earnings for S&P 500 companies to $146.01 from $138.62. Golub’s profit forecast rose by $16 to $155, driven by lower taxes and faster economic growth.

Before this week, strategists on average expected the S&P 500 to reach 2,838 by the end of next year, a 6 percent gain from its last close, according to a survey by Bloomberg.

©2017 Bloomberg L.P.