This has been a roller-coaster year for the stock market, the economy and the jobs market. We went from a booming economy to a COVID-19-induced pandemic recession in a matter of weeks. The all-time highs of the Dow Jones industrials and S&P 500 in March turned into the panic-selling death of the 10-year bull market in less than a month. However, the S&P 500 is already back to challenging its all-time highs

Goldman Sachs is now calling for new highs in the stock market, with an S&P 500 target of 3,600 by the end of 2020. That’s a 20% target hike, and the firm is not alone in its view.

Goldman Sachs may not have a crystal ball, but the firm does have a view of the wealthiest clients and the top institutions around the country and the globe. Even with the chaos of a looming election, and even with continued civil strife, it seems as though the death of the bull market in March was greatly exaggerated.

One assumption for a higher S&P 500 target price is a potential COVID-19 vaccine. Any vaccine, or even a solid treatment, would lead hopes of a stronger economic rebound in 2021. Remember that the stock market tries to use assumptions for determining where things will be months into the future rather than just making assumptions on today’s data. Otherwise, the unemployment reports and the over 30% drop in gross domestic product would have killed the markets.

What is amazing about the most recent jump is that stocks have rallied more than 50% from their panic-selling lows around March 23, 2020. That’s not normal, but it also dusted many investors, and many investors have missed the boat. Investors have seen massive gains from the companies that win on the stay-at-home and work-at-home themes, and companies that are dependent solely on people coming into their stores or onto their properties have suffered.

One continued driving force will be lower equity “risk premiums” ahead. This will come from a combined expectation of economic growth and from overall investor confidence. Goldman Sachs sees this as enough to look beyond the 2020 elections in November and the rising tensions between the United States and China.

According to the Goldman Sachs forecasts, investors have remained more focused on a 2021 recovery, and the firm sees S&P 500 earnings recovering by 30% and 2021 gross domestic product rising by 6.4%.

As for the S&P 500 itself, the nine-point gain to 3,382 on Monday is still short of the 3,393.52 all-time high in February. The S&P 500’s closing high on February 19 was 3,386.15.

As noted earlier, Goldman Sachs is also not alone in its calls for a much higher equity prices.

First Franklin recently called for new all-time highs before the election. Its year-end S&P 500 target is 3,500.

Canaccord Genuity has noted that the S&P 500 was bumping up against its “3,300+” 12-month target, but noted the plus is there because it was a minimum level. The firm said it simply has no idea how high the multiple should be with an unlimited level of monetary stimulus and backstop of credit from the Federal Reserve. The firm also believes the fear of another COVID-19 panic and subsequent credit risk has caused investors to underappreciate the potential for a synchronized global recovery in 2021.

Note that the current makeup of the stock market may not require the broader economy to be “back to normal again” for the major indexes to hit all-time highs. The tech-heavy Nasdaq, dominated by all of the stay-at-home and work-from-home stocks, already has recovered to and then gone above its pre-pandemic highs.

As for size, there are four stocks with a market cap of $1 trillion to almost $2 trillion (Apple, Amazon, Microsoft and Alphabet). Another four stocks have a market cap of $500 billion to just under $1 trillion, and roughly 80 more companies have market caps above $100 billion but below $500 billion.

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