Top Stories
Top Stories
Investing

This simple chart shows stocks could have another big gain this year

Key Points
  • "Historically, strong returns tend to be followed by strong returns in the subsequent year," Credit Suisse's Jonathan Golub said.
  • Equities had a banner year in 2017, with the S&P 500 rising 19.4 percent.
  • Golub has a 3,000 target on the S&P 500 for this year.
VIDEO4:2904:29
What the first trading day of the year means for stocks

Stocks are poised for another year of strong gains on the back of 2017's big jump, according to a simple chart put together by strategists at Credit Suisse.

The has gained more than 18 percent in a year 20 times since 1951, the chart shows. Those advances have been followed up by an annual increase of more than 10 percent on 10 occasions during that time.

Check out the chart below:

Calendar price returns chart 180102

"Historically, strong returns tend to be followed by strong returns in the subsequent year," Jonathan Golub, the bank's chief U.S. equity strategist, said in a note Tuesday.

Equities had a banner year in 2017, with the S&P 500 rising 19.4 percent. Stocks got a boost last year from strong growth in corporate earnings, solid economic data and expectations for lower corporate taxes. Last month, President Donald Trump signed a bill that slashed the corporate tax rate in the U.S. to 21 percent from 35 percent.

Credit Suisse was already bullish on U.S. stocks for 2018. Golub has a 3,000 target on the S&P 500 for this year. His target — along with his $155 earnings-per-share estimate — reflect "better corporate results (primarily in TECH+, Energy and Materials), a pickup in GDP forecasts for the upcoming year, and recent tax changes," he said.

WATCH: What could sidetrack the markets

VIDEO1:2701:27
The looming risk that could sidetrack stock market’s ‘animal spirits’