S&P 500 will climb 6% more by year-end, predicts Blackstone's Byron Wien

  • Wall Street legend Byron Wien stands by the year-end prediction he made for the S&P 500 way back in January.
  • He says he's "not backing away" from forecasting a level of 3,000 for the index.
  • Such a move would represent a 6.6 percent increase from Wednesday's close of 2,813.89.

Wall Street legend Byron Wien stands by the year-end prediction he made for the S&P 500 way back in January.

He told CNBC's "Squawk Alley" on Thursday he's "not backing away" from forecasting a level of 3,000 for the index by the end of 2018; such a move would represent a 6.6 percent increase from Wednesday's close of 2,813.89.

"If we don't get to 3,000, we'll get pretty close to it," said Wien, currently a vice chairman at the Blackstone Group.

When he unveiled his annual list of 10 Surprises for 2018 on Jan. 18, the S&P 500 was around 2,800 and about a week away from setting record highs that wouldn't be eclipsed again late August. At the time, he also called for a 10 percent correction during the year.

In fact, there were brief corrections in February and again in October, which saw the S&P 500 plunge nearly 7 percent for the month. But so far in November, as of Wednesday's close, the index made back more than half that slide.

"We got undervalued in the correction [in] October," said Wien, who joined Blackstone in 2009 after nearly 23 years as chief U.S. investment strategist at Morgan Stanley.

Going forward, the stock market's gains depend on strong earnings, he said. "Earnings next year are going to be good, too. They won't be up 20 [percent], but they may be up 10 [percent]."

"In an environment where earnings are increasing 10 percent, the market is not overvalued as long as interest rates don't go up too much," he concluded.

The last record close on the S&P 500 came on Sept. 20, when the index finished at 2,930.75.