Tags: Goldman | O’Neill | S&P | 500 | May | Jump | 20 Percent

Goldman’s O’Neill: US Stocks May Soar 20 Percent Next Year

By    |   Wednesday, 22 Dec 2010 08:36 AM

The recent rebound in U.S. economic growth and stock prices that has taken the market to a two-year high will continue into next year with vigor, says Jim O’Neill, chairman of Goldman Sachs Group Inc.’s asset-management business, said. He told CNBC that the Standard & Poor’s 500 Index may rise 20 percent next year.

He also says 2011 will represent the “Year of the USA," in a report cited by CNBC.

The economy, which expanded 2.6 percent in the third quarter, will grow 3.4 percent next year and 3.8 percent in 2012, he forecasts.

“I see lots of very encouraging signs,” including declines in weekly jobless claims in recent weeks, O’Neill told CNBC.

O’Neill said gross domestic product may increase more than 4 percent during some quarters of 2011.

"This growth is likely to be strong and robust enough to lead to declining unemployment, which, if correct, should mean that the worst of the social consequences of the credit crisis should start to ease," O’Neill said.

That means bond yields will keep rising and the dollar can gain "quite a bit."

To be sure, the economic and financial picture won’t suddenly return to normal, as consumers must continue to pare down debt, and the government must deal with the current account and budget deficits, O’Neill maintains.

"I think 2011 in this regard, will be the beginning of a new phase in which the U.S. has strong GDP growth, but it will be led by exports and investment."

Others share O’Neill’s bullishness. “There is growing optimism about the … U.S. economy in 2011,” Alan Gayle, senior investment strategist for RidgeWorth Investments, tells The Associated Press.

“We’re 18 months into this recovery, and good things are gradually happening.”

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The recent rebound in U.S. economic growth and stock prices that has taken the market to a two-year high will continue into next year with vigor, says Jim O Neill, chairman of Goldman Sachs Group Inc. s asset-management business, said. He told CNBC that the Standard Poor...
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Wednesday, 22 Dec 2010 08:36 AM
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