The Dow needs to rally 7.5 percent in the next three trading days to bring it to a break-even year.
It may seem like a tall order, but investment strategist Edward Yardeni believes it’s possible.
He cites the unprecedented momentum generated by the Dow’s record-setting Wednesday close that could bring 2018 back into the green — ultimately driving stocks back to all-time highs in 2019.
“Investors are coming back to their senses. There was way too much fear driving this market,” the president of Yardeni Research said on CNBC’s “Trading Nation.”
His comments came as the Dow was posting the largest point gain in its history, surging 1,086.25 points or 4.98 percent. It was the biggest daily percentage gain for the index since March 2009.
“The economy is still doing pretty well,” Yardeni said, adding retailers are indicating they’re seeing record Christmas season sales.
Yardeni, who has spent decades on Wall Street running investment strategy for firms such as Prudential and Deutsche Bank, has maintained his bullish stance through the volatile last three months.
“This bull market has been described as the most hated bull market of all time,” he said. “I don’t think there’s a recession out there, and I think when the market realizes that, we’ll see the market bounce back.”
And if Wednesday is any indication, Wall Street is getting the message.
During a phone interview after the historic market close, he said, “What has been crazy to the downside, could now be crazy to the upside.”
For 2019, Yardeni has a 3,100 year-end price target on the S&P 500, a more than 20 percent gain from current levels.