The Standard & Poor’s 500 has risen 14.5 percent so far this year, and Wall Street investment strategists see further gains ahead, both this year and next, says this week’s cover story. The 10 market strategists Barron’s consulted predict the S&P 500 will see will reach 1700 by the end of the year.

Three of the 10 pros Barron’s consulted expect to see the S&P 500 finish the year at or close to 1600, down from last week’s 1633. They see earnings disappointments ahead, and worry that investors will react negatively when the Federal Reserve tightens monetary policy, as seems likely this fall.”

While stalled corporate earnings growth failed to drive stock market gains in the first half of this year, the other bullish strategists see profit growth accelerating sharply in the fourth quarter as U.S. gross domestic product (GDP) improves. This is despite rising interest rates and another impending round of federal budget wrangling.

The Case for Tech

The S&P 500 information-technology sector has returned only 10% this year. Yet, profits in the industry are rising faster than in the broader market, and the tech sector has more cash than other sectors, says Morgan Stanley’s Parker.

But the consensus of the 10 strategists was not unanimous. Here’s a rundown of each strategist’s predictions for where the S&P 500 will end the year, expected GDP growth in the second half and in 2014, the 10-year Treasury yield, as well as favored sectors and sectors to avoid:

Source: Barron’s



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