Tags: Cohen | stocks | rise | 2013

Goldman Sach’s Cohen: Stocks Will Rise 10-15% Next Year

Thursday, 06 Dec 2012 08:22 AM

By Dan Weil

Positive economic fundamentals will send U.S. stocks up 10 to 15 percent in 2013, according to Abby Joseph Cohen, senior investment strategist at Goldman Sachs.

The Standard & Poor’s 500 Index has gained 12 percent so far this year.

As for the fundamentals, Cohen noted at an investment conference Wednesday that personal debt has dropped to the lowest percentage of personal income since the 1990s, CNNMoney reported.

Editor's Note: The Truth About the Economy — Government Documents Lead to Eerie Conclusion

In addition, large companies are awash in cash, thanks to their sound management and the record-low interest rates that have curbed their borrowing costs.

"We are slowly growing our way out of the most extreme version of the debt crisis," Cohen said.

The fiscal cliff could represent a fly in the ointment. If it’s not resolved by Dec. 31, stocks could struggle early next year, she said. But a strong rebound would follow.

As for fixed income, "The next big move in bonds will be down," Cohen said.

Barry Bannister, chief portfolio strategist at Stifel Nicolaus, shares Cohen’s enthusiasm for stocks.

The S&P 500 should rise to 1,600 in the first two months of next year, up 14 percent from Wednesday’s close, he told CNBC.

That assumes the fiscal cliff will be avoided, he said. "Right now the central banks have been in the lead around the world [with their massive easing], and we need the politicians to fall in line."

Editor's Note: The Truth About the Economy — Government Documents Lead to Eerie Conclusion

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