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Many. Okay, Ed, tell me about this rally. What do you think about this ? Where is this market heading? It is moving upwards. I mean, my year-end forecast is 8,250, and suddenly that looks pretty restrained. This is only 6.5% of the distance. I think we have FEMO, which I've talked to you about before , and that's an incredible momentum in earnings.
That's really what it all comes down to. I mean, we have a lot of concerns in the Middle East, about the Fed, but the economy continues to perform great . It is sustainable, and we see it in the profits. Are you happy with where the earnings estimates are heading? That is, if this is the main thing for you, then this is also the main thing regarding the risks that exist.
Well, I follow the consensus analysts' earnings forecasts very closely because I think that's what the market is pricing in, their forecast for the rest of this year and next. And this is called forward profit, when you take the weighted average of this year and next year. It is at a record historical level.
I think it will reach over $400 per share by the end of the year, which will be the expectation for next year. I think 400 multiplied by 20 and you get 8000. Pretty reasonable estimates. I think the earnings will be a little better and the valuation multiple could be higher. So I feel pretty comfortable with that.
Yes. You said, I don't know, maybe last week, that the tech sector looked tired. Now he definitely looks cheerful again. No, actually on Sunday I posted a note about information technology being on sale. This may have been an old note , but clearly you have to be on the alert in this market . But I actually pointed out that semiconductors were cheap, and that the overall information technology sector was trading at the same multiple as the market as a whole.
And that's unusual because growth stocks typically trade much higher. And when you look at the S&P 500 and information technology, it's nothing like what we had in 1999 and 2000. So, suddenly all the talk about this being a tech bubble is dismissed. I mean, there was a note today from a gentleman from Citadel Securities who suggested , you know, that we ourselves got rid of the excess that was in the market.
Now we are ready to reboot. There is no end to the basics. It seems you agree with this . Certainly. I think it all depends on profits. The valuation ratio decreased because profits increased, and investors were nervous about these figures and did not want to overpay, so they booked a profit . Now they regret it and come back again.
Do you like the expansion story? Certainly. We have been recommending market share for the IT sector since the end of last year, and in my opinion, overall it has worked quite well. We advised increasing the share of financial, industrial and healthcare sectors , and it worked very well.
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