The end of 2013 is here. The 2014 calendar year begins shortly.
We know stock markets look out 6-12-18 months on future
earnings outlooks for guidance. That means it is time for
each of us to choose a target for the year-end 2014 on the S&P
To kicks things off, sell-side equity teams have been issuing
year-end forecasts. Last year, as a group, they were bullish.
But they were bullish in a modest, analytic sort of way.
Nearly every sell-side shop missed the
market that showed up in 2013.
The respected JP Morgan Chief U.S. Equity Strategist Thomas Lee
rolled out his 2014 forecasts with
a year-end target of 2,075 for the S&P 500 -
one of the most bullish calls out there.
Lee says the S&P 500 index could gain another +20% in
To him, the current bull market is acting like a "classic" secular
bull market, which is now in its sixth year, and which has
historically been very strong. A classic secular bull market
is defined as one in which strong investor sentiment drives prices
higher. He says the anecdotal evidence has been pointing to record
highs on investor sentiment.
He bases this S&P 500 call on 15.7 times 2015 earnings per
share of $132. Maybe that seems like a reach? But Lee argues
investors are paying 24.3 times for a high-grade bond, 16.6 times
for a high-yield bond, and 35 times for a U.S. 10-year bond.
My RTI questions: What is YOUR Year-End 2014 Forecast
and Stock Market Reasoning on the S&P 500? Are you ALL-IN
for a bullish 2014?
BOFI HLDG INC (BOFI): Free Stock Analysis
BON-TON STORES (BONT): Get Free Report
GRUMA SA-ADR B (GMK): Free Stock Analysis
To read this article on Zacks.com click here.