Tags: Peroni | Dow | 18000 | Fed

Advisors Asset Mgmt's Peroni: Dow Will Surge to 18,000 in 2 Years

By Dan Weil   |   Thursday, 09 May 2013 07:56 AM

The Dow Jones Industrial Average has just surpassed the 15,000 level for the first time, and Gene Peroni, portfolio manager at Advisors Asset Management, says the index will reach other milestones soon.

Indeed, he sees the Dow rising 20 percent over the next two years to 18,000.

The Federal Reserve's massive easing program, a strengthening U.S. economy and better-than-forecast earnings will propel the move, Peroni tells CNBC.

Editor's Note:
The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

As for the central bank, "No doubt the Fed has played a very significant role here, and if there was no sign of economic revival, then ... we would really be in a pretty dire situation," he explains.

"But the fact of the matter is the economy is really improving in a number of different areas. ... There's real evidence the Fed is having a positive bearing."

In recent days, strong housing and jobs data have been released.

With the Fed keeping interest rates rooted near zero, monetary policy is a known quantity, allowing investors to focus on earnings, Peroni says.

"Earnings are starting to show some real drive, ... beating expectations on Wall Street by a very significant margin quarter after quarter, even though we're told every quarter it's not going to happen," Peroni notes.

"The market likes anticipation, that's what it's getting right now — good expectations."

The stock market has defied the hesitancy of some investors in recent weeks.

"This has been a pretty resilient market," Sean Lynch, global investment strategist for Wells Fargo Private Bank, tells The Wall Street Journal. "Investors have played the worry game, and those that have sat on the sidelines in cash are starting to question that."

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

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