Paulsen: Stocks to Surge Amid Robust Recovery

Thursday, 25 Feb 2010 08:20 AM

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
The U.S. economy is beginning a “robust economic recovery,” says James Paulsen, the chief strategist of Wells Capital Management.

“That bodes well for stocks, even though the market performed so strongly last year from the March-panic lows. We won't see a moon shot like last year. But I think there are plenty of good fundamental underpinnings,” he said.

During 2010, investors could see the S&P 500 increase to 1,350, he told Barron’s. The S&P 500 was recently at 1,105.24.

“Longer term, the recovery cycle is likely to follow one of two scenarios. The first would see a strong recovery and a surge in corporate earnings," he said.

"Stocks would certainly make a lunge toward their all-time highs of, say, 1,565 in the S&P and likely reach those levels.”

If inflation is averted, Paulsen says the economy will have a “real shot at a prolonged secular bull market. The key will be keeping inflation under control a couple of years out, when the recovery is in full swing.”

Paulsen is optimistic about both stocks and the economy. He predicts that GDP growth will rise to 5% from 3% to 4%.

“Liquid-asset holdings of households and businesses now stand at around $10 trillion. That's a record, relative to GDP," he said

"This money is likely to act as a slow-release Tylenol tablet over the next several years, leeching into the market and driving stock prices higher. Stock prices should also be bolstered by low core inflation," he said.

"Finally, you've got accelerating global growth, particularly in the developing world. Thus, we're likely early and not late in the stock bull market.”

The weak labor market will prevent the recovery from moving quickly, said Federal Reserve Bank of Minneapolis President Narayana Kocherlakota, Dow Jones reported.

"I do think that the economy is on the mend, and should continue to recover over the next two years in terms of both GDP and unemployment, but at slower rates than we would like," he said.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Hamas' Policy Is to Destroy Israel

Thursday, 24 Jul 2014 09:05 AM

There is no disputing that it is Hamas's intent , it is Hamas's policy , to destroy the state of Israel and to use terro . . .

GOP, Admit Benghazi Errors and Move On

Wednesday, 16 Jul 2014 09:17 AM

So what can Republican Rep. Trey Gowdy, the chairman of the Benghazi special committee, learn from LeBron? . . .

'Hard Choices' Reveals Strong, Decisive Hillary

Thursday, 10 Jul 2014 09:58 AM

The reviews are in on "Hard Choices," Hillary Clinton’s history of her four-year tenure as U.S. secretary of state. They . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved