Since the recession scare of last summer, the stock market has been on a tear, and economist Brian Wesbury of First Trust, says this strength is going to continue through 2012.
Wesbury predicts that the economy itself will grow about 3% in 2012, better than most observers expect.
The stock market, meanwhile, will rise based on stronger-than-expected earnings: Wesbury is looking for earnings of $110 a share on the S&P 500, versus the consensus of $108.
And what about those who are concerned that the economy still might lurch into a double-dip recession?
They're just the "wall of worry" that the stock market is climbing, says Wesbury. And the stock market will continue to trample these folks right up until the time they give up and go long.
Although Wesbury's forecast is certainly encouraging, the risk remains a potential stumble in the economy and/or a return to more normal earnings margins. Corporate profitability is currently near record-highs, and, in the past, margins have never remained at such elevated levels for long. If profit margins do "mean-revert," as many of the worriers think they will, stocks will likely drop sharply.
Some of these worriers, such as John Hussman of Hussman Funds, think the economy will turn downward this quarter. Wesbury, obviously disagrees.