Noted stock-market bull Laszlo Birinyi, of Birinyi Associates, says he's still upbeat on U.S. equities but just a bit more optimistic these days.

Steering currents guiding the direction of markets are hard to find, namely due to the European debt crisis and the looming "fiscal cliff" in the United States, a combination of scheduled expiring tax breaks and government spending cuts that will kick in at the same time at the end of the year. A cooling Chinese economy also clouds the horizon, making it even more difficult to craft investment strategies.

“There are too many variables which are beyond our capabilities to absorb and forecast,” Birinyi said, according to USA Today.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

Still, expect the Standard & Poor's 500 Index to hit 1500 by year's end, or 7 percent above current levels.

Europe is cause for particular concern, Birinyi said, due to the sheer uncertainty over whether Greece can avoid defaulting on its debts and exiting the eurozone, possibly pressuring the larger Spain to follow suit.

"How it unfolds and when it unfolds, I am not even going to try to forecast,"Birinyi noted.

European policymakers recently made the euro equivalent of $123 billion for Spain to prop up its banking sector and bail out regional governments inside of the country, though yields have spiked well above 7 percent in Spanish government debt markets, a sign that investors view the country as in need of a sovereign bailout.

"I never thought I would have to worry about a region of Spain," said Birinyi. "It is irresponsible to say that (a bad outcome in Europe) is priced into the market. It is not."

Some investors say the European debt crisis has sent stocks falling too far, especially in healthy companies.

Even if the eurozone does breakup, opportunities will arise from some companies to fill gaps left vacant by others in countries exiting the currency zone should it come to that.

“For the first time in my life, I’ve started to buy some European stocks, and I will buy more over time,” said Marc Faber, the publisher of the Gloom Boom & Doom report, according to Bloomberg.

“Equities have become inexpensive.”

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.