Wednesday, October 6, 2010

A Note from my friend Sam Stovall

at S&P where he is chief Investment Strategist

"Investor’s vision appears to be changing from 3-D (double-dip with deflation) to 20/20, and is being replaced by the expectation that the U.S. economy will experience a half-speed recovery. Our 12-month target for the S&P 500 is 1270, implying a 9% gain from the current level and an 1180 year-end value. Market optimism appears to be supported by the unwinding of fears that drove share prices lower by 16% through early July, a possible second-round of quantitative easing, and a potential change in Congressional leadership. Earnings growth projections also remain strong for 2010 and 2011. Finally, commodities and foreign investments will likely benefit from the expected further weakening of the U.S. dollar."

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