Tags: Bannister | Lee | 2014 | S&P 500

Wall Street Crystal Balls Don't Share the Same 2014 Vision

By    |   Tuesday, 31 December 2013 06:44 AM

In a battle of Wall Street crystal balls, Barry Bannister, chief equity strategist at Stifel Nicolaus & Co., says fresh bulls will be a little late for the party in 2014, while Thomas Lee, chief U.S. equity strategist at JPMorgan Chase, predicts more double-digit gains in the new year.

Bannister told USA Today the stock market has already experienced a "melt-up" from burgeoning share prices, with gains in the S&P 500 hitting 29 percent near the end of 2013.

Bannister predicted more upside may be limited by the mature age of the bull rally, which started March 9, 2009, the fact price-earnings ratios appear swollen and investor optimism is increasing.

Editor’s Note:
5 Reasons Stocks Will Collapse . . .

"It's a little late to be bullish, but I am not bearish. I expect a flattening out of the market," Bannister declared.

USA Today said he is calling for a "flat, or even a modestly down year." Bannister calls for the S&P 500 to end at 1,750, down 5 percent from the current rate.

But Lee told the newspaper he does not believe the party is over yet.

Lee predicted the upward stock market momentum would continue in 2014, at least until a recession caps growth and corporate profits.

Lee expects the S&P 500 will strike 2075 by the end of 2014, a gain of about 13 percent.

"Stock market bulls are self-reinforcing," said Lee. "Historically, bulls get stronger. As [the stock market] goes up there is wealth creation, which creates more incentive to invest."

Other stock market prognosticators told Kitco News where they would invest $10,000 for 2014, and equities were not always their first choice.

Ron Paul, former U.S. Representative from Texas and Republican presidential candidate, said he prefers real estate and gold.

"I'd avoid [the stock market] and I guess I wouldn't buy government bonds either," Paul said. "Our currency is weak but it hasn't tumbled in the last year, but I wouldn't want to hold my extra money in dollars or in government debt. That's just looking for trouble."

Rich Ilczyszyn, founder and chief market strategist at iiTrader, would take a much more diversified approach with a $10,000 in invest next year.

Ilczyszyn said he would divide the money among 30 percent stocks, 20 percent short bonds, 20 percent cash, 15 percent emerging markets, 9 percent real estate and 6 percent precious metals.

Pamela and Mary Anne Aden, co-editors and publishers of The Aden Forecast, also told Kitco News they would spread their 2014 dollars around. Their model allocation would be 50 percent stocks, 30 percent real estate, 10 in cash (perhaps the euro) and 10 percent in gold and silver.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

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In a battle of Wall Street crystal balls, Barry Bannister, chief equity strategist at Stifel Nicolaus & Co., says fresh bulls will be a little late for the party in 2014, while Thomas Lee, chief U.S. equity strategist at JPMorgan Chase, predicts more double-digit gains in the new year.
Bannister,Lee,2014,S&P 500
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2013-44-31
Tuesday, 31 December 2013 06:44 AM
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