Recent gains by General Electric, Citigroup and Microsoft shares indicate the Standard & Poor’s 500 Index will jump another 13 percent this year, says money manager Laszlo Birinyi.
The head of Birinyi Associates forecasts a year-end level of 1,325. The index recently traded at 1,189.44.
The S&P 500’s activity March 22 was a key signal for further gains, Birinyi says.
Early that day, the index slid 0.6 percent after the healthcare reform package was approved, worries flared about Greece’s financial crisis and Tiffany & Co., the world’s second-largest luxury jeweler, failed to meet profit estimates.
But the S&P 500 rebounded to rise 0.5 percent for the day and proceeded to advance for a fourth straight week.
“Given our trading background and approaches, we are impressed with the resilience of the market, which, in effect, is what trading desks mean when they say the market ‘acts well,’” Birinyi wrote in a report sent to clients and obtained by Bloomberg.
“Large stocks are now likely to be contributors rather than detractors. ... As we have regularly noted, the negative case is neither compelling nor persuasive”
Birinyi’s year-end forecast of 1,325 for the S&P 500 exceeds the 1,243 average prediction of strategists surveyed by Bloomberg by about 7 percent.
Not everyone is bullish on stocks.
“The market is as overvalued now as it was undervalued a year ago,” David Rosenberg, chief economist for Gluskin Sheff, told The New York Times.
“There’s a very high degree of complacency.”
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