Salient to Investors:
Laszlo Birinyi at Birinyi Associates expects the fourth and final stage of the bull market to take the S&P 500 to a record high in 2013, driven by capitulating bears, individual investors piling in, US housing continuing to expand, and markets rallying in Europe. Birinyi said this 4-year bull market resembles the bull markets in the 1980s, up threefold, and the 1990s, up fourfold.
The S&P 500’s 12 percent advance in 2012 has exceeded the average strategist prediction of 6.9 percent.
Roger Pine at Briaud Financial Advisors said short-term, 2011 is the most direct and relevant precedent to today.
Analysts predict profits will rise 5.2 percent in 2012 implying a P/E ratio of 13.6 for the S&P 500 versus the 6-decade average of 16.4. The median economist expects GDP to grow 2 percent in 2013 and 2.8 percent in 2014.
Chad Morganlander at Stifel Nicolaus expects a gradual improvement in the US economy which will follow through to global markets.
David Joy at Ameriprise Financial said the US economy is improving, in housing and manufacturing – stocks will have a good 2013.
The S&P 500 took 25 years to reach a new high after the Great Depression. Since then, it has taken 3 years on average for the index to surpass previous records – the last high was in October 2007, and it took 7 years in the 1970s and 2000s to exceed old highs. It has taken 6.5 years to surpass previous DJI highs.
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