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You have to wonder if Wall Street strategists have a newfound confidence in their strut right now. The S&P 500 is up more than 9 per cent this year, hitting its highest level since 2008, the U.S. labour market is showing some big improvements and worries about overseas financial blowups have fallen off the radar screen.

These are good times to be a bull, and the bulls are responding with, well, more bullishness: Two prominent Wall Street forecasters delivered remarkably optimistic targets for the S&P 500 on Thursday, essentially arguing that the year-to-date gains are just the beginning of good times ahead.

Jonathan Golub at UBS upped his target on the index to 1,475 from 1,325. That's an 11 per cent increase and implies that the strategist sees overall gains this year of more than 20 per cent. Part of the gains come from improved market conditions, which have driven earnings multiples higher as policy makers come to grips with Europe's sovereign-debt crisis.

However, he also believes that low expectations for corporate profits this year will shift with, among other factors, better U.S. economic data and lower financial stress.

The new target makes Mr. Golub the most bullish of the strategists followed by Bloomberg News as it tracks forecasts throughout the year. Yet, five other strategists have also increased their targets for the S&P 500, if more modestly, suggesting that forecasters are keen to keep up with the stock market's gains.

Laszlo Birinyi of Birinyi Associates – who doesn't factor into the Bloomberg list of strategists because he's not associated with a brokerage – is even more bullish than Mr. Golub. He expects the S&P 500 has the potential to rally to a record high of 1,700 before the end of the year, implying overall gains of 33 per cent in 2012.

His rationale stems from the belief that the stock market has not factored in the possibility that the U.S. economy could be considerably stronger than most people realize, surprising investors and driving stocks to gains similar to those seen in 1995, when the S&P 500 soared 34 per cent on the back of similar surprises.

Still, the average year-end target among the 12 strategists followed by Bloomberg is now 1,351 – which is more than 20 points below the current level of the S&P 500. Strategists tend to be bullish types, who prefer to err on the side of seeing modest gains ahead. If so, target hikes might be just getting started.

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