With the S&P 500 at about 1% of all time, Wall Street bull Edward Yardeni predicts a new record is coming.
Yardeni Research's president believes that between now and the end of next year, the index will rise 17% from current levels.
"I have 3,500 as my goal for next year," he said on Friday to CNBC "Trading Nation." "We will get there with higher earnings with perhaps a slightly higher valuation, as the perception remains that interest rates are not rising much, if any."
While major indices break a three-week winning streak on Friday, Yardeni highlights the market's recent composure for its latest bullish forecast.
He gives the drone attack on Saudi Arabia's infrastructure last weekend as an example of what could easily have been seen as a strong catalyst for deep selling.
"This would have been a good opportunity to have a significant sale. Instead, it was rather insignificant," said Yardeni. "The market is there and should do better for the rest of the year."
Yardeni, who has spent decades on the street executing investment strategies for companies like Prudential and Deutsche Bank, bases his optimistic argument on the notion that Washington and Beijing agree on a trade war deal, a strong US labor market that will keep consumers spending and a recovering global economy due to easy central bank policies.
Positive developments will boost growth stocks by 2020, according to Yardeni. He doubts that the value, which recently got a larger offer, will outperform in the coming months.
"This has been a very interesting bull market. It seems that from time to time leaders become laggards and laggards become leaders. There is a lot of rotation in this market from the beginning," he said. "I don't know if I would read much about it."
Yardeni says investors were attracted to value because it was so cheap, writing in a recent note "the advanced P / Es of growth and value stocks have not been so great since the days of the technology bubble and its aftermath."
He speculates that growing inventories will take the market to new heights, listing discretionary, semiconductor and financial consumers as the biggest beneficiaries.
"The economy is doing well and the fundamentals for rising stocks are still intact," Yardeni said.