Tags: Golub | stocks | 15 percent | 2015

RBC's Golub: Stocks Will Rise 12 to 15 Percent in 2015

By    |   Friday, 19 December 2014 04:30 PM

Stocks have resumed their climb, with major indices again approaching record highs. And Jonathan Golub, chief U.S. market strategist for RBC, predicts they will advance another 12 to 15 percent next year.

A 15 percent rise from the S&P 500's level of 2,067 Friday afternoon would put the index at 2,377. It has generated a return of 14 percent so far this year.

"I think the year ahead will look strikingly similar to what we saw in 2014," Golub told CNBC. That's "not because the economy is surging, but because interest rates will stay low, inflation will stay low, and corporations are going to do a great job managing expenses and buybacks."

The economy expanded 3.9 percent in the third quarter, and many analysts expect growth of about 3 percent through next year.

The Federal Reserve has kept its federal funds rate target at a record low of zero to 0.25 percent for six years. Most economies expect the Fed will gradually begin raising rates around mid-2015.

Slow rate hikes shouldn't hurt stocks, as they will be sign as a sign of economic strength, Golub said.

MarketWatch columnist Jeff Reeves offers several stock-investing themes for next year.
  • "U.S. valuations aren’t excessive," he writes. "According to FactSet, the forward price-to-earnings ratio of the S&P 500 now is 16.2, the highest level since 2005. However, that reading is basically on par with the 15-year average, so this isn’t a sign for panic.
  • "Tech presents growth opportunity.
  • "Financials looking fit." Banks have vastly improved their financial health since the 2008-09 financial crisis.
  • "[Baby] boomers are a sure thing." That creates an opportunity for investing in countries that serve this demographic, such as healthcare and insurance companies.
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Stocks have resumed their climb, with major indices again approaching record highs. And Jonathan Golub, chief U.S. market strategist for RBC, predicts they will advance another 12 to 15 percent next year.
Golub, stocks, 15 percent, 2015
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2014-30-19
Friday, 19 December 2014 04:30 PM
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