Stocks Looking Bullish in 2011 – Optimism Abounds – 5% to 15% Gains Seen
Wall S
treet analysts have pulled out their 2011 crystal balls. Most of them have a bullish grin on their faces. The big houses are seeing gains of 5% to 15%.
Many investors in the wake of the 08 recession and the loss of forward momentum of the economy in the months following have just said no to U.S. stocks. They have been stalked by two big ugly grizzlies in ten years that stripped the financial hide from their portfolios.
The Investment Company Institute calculates that stocks have lost $94 billion.
Barry Knapp, Barclays Capital strategist, is very bullish. Knapp wrote in an article, “Outlook 2011”, “We are more optimistic than we have been at this time in each of the last two years,”. His prediction is for a gain of 15% with Standard & Poor’s 500 index to hit 1420 by December 31, 2011.
Knapp looks for the economy to improve, for earnings to maintain growth and for the already low interest rates to be kept low by the Federal Reserve.
Part of analysts optimism stems from the ability of the 2010 market to stare down debt problems in Ireland and Greece, fears related to a QE2 generated trade war, possible deflation or rampant inflation, and China’s currency policy.
The most conservative view still believes their will be growth. William Stone of PNC thinks that S&P 500 will go to 1310 for a 6% increase. Stone says, the economy will move from, “rebound to expansion” in 2011. Stone likes high-quality stocks, international stocks and dividend paying stocks. Expansion gives the advantage to stocks over cash and government bonds in the New Year.
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