Results from our June bear vs. bull survey: 61.2% bullish and 38.8% bearish. Did you catch the AI fever? Wall Street seems to have.

In recent weeks, several major banks raised their year-end forecasts for the S&P 500 (currently trading at 4,221):

• Bank of America: 4,000 → 4,300
• RBC: 4,100 → 4,250

And BofA thinks the S&P 500 could even rise to 4,600 this year (+9% from current levels) — as cost cuts and efficiency gains from automation kick in.

Is the market expensive or cheap?

Looking at the commonly used valuation metric price-to-earnings ratio, the S&P 500 can be expensive by historical standards. But Julius Baer’s Chief Investment Officer argues that we’re in a new era that deserves new thinking:

• In the early 1900s: Financials and transport companies dominated the S&P 500 index.
• Today: Tech and healthcare companies with higher growth prospectives account for a large portion of the index.

Why do stocks deserve a premium? Tech giants today are much more profitable (did someone say AI?) and return more money to investors via dividends and buybacks.

Based on a five-year forward earnings growth, finance prof Aswath Damodaran thinks the S&P 500 is pricing in 9.8% long-term annual growth — in line with its average return since 1900.

It was a bad decision to bet against corporate America in 1900, and the same might hold true 123 years later.