Morgan Stanley has a new chief U.S. equity strategist in town, and he's uber-bullish on stocks in 2017.
"The cyclical upturn that began a year ago has less to do with President Trump and more to do with the global business cycle," with Trump simply "turbocharging" things, Morgan Stanley's Michael Wilson wrote in a Monday note to clients.
"The end of the cycle is often the best," he added. "Think 1999 or 2006-07. In a low-return world, investors cannot afford to miss it."
Wilson has laid out a "bull case" for stocks that calls for the index to reach 3,000 points within 12 months, representing a gain of almost 30 percent. His "base case" scenario calls for gains of nearly 15 percent, with the index hitting 2,700.
The S&P 500 was last trading Monday around 2,363 points, up slightly for the day.
"Exceptionally loose financial conditions encourage the shift toward investor euphoria," Wilson wrote Monday. "Market technicals are in very good shape [now] ... 2016 was a difficult investment year for many, but the reality is that if one simply followed the business cycle and ignored the political one, it was fairly straightforward."
This is the first major strategy note from Wilson, who took over the chief strategist role from Adam Parker earlier this year. Before assuming his new role, Wilson served as Morgan Stanley's chief investment officer of wealth management. He is a 27-year veteran of the bank.
So, how should investors act on Wilson's bullish sentiment?
Based on a "late-cycle thesis," Morgan Stanley is overweight financial, industrial, energy and technology stocks, the strategist said. He didn't offer any specific stock picks
The energy sector in particular, Wilson added, is the single largest incremental driver of S&P 500 earnings growth this year.
"Energy is a classic late-cycle sector and it could offer a modest hedge against potentially rising geopolitical risk," he wrote.
S&P 500 year-to-date performance
Source: FactSet