Tags: Harnett | stocks | 20% | policy

Absolute Strategy's Harnett: Stocks Will Soar Another 20 Percent This Year

By    |   Friday, 25 April 2014 09:57 AM

The S&P 500 and Dow Jones Industrial Average are both within 1 percent of their record highs, but that won't prevent further gains for stocks, says Ian Harnett, a European analyst at Absolute Strategy Research.

Stimulative fiscal and monetary policy around the world will help stocks rise another 20 percent this year, he told CNBC. That policy will boost purchasing power, Harnett said.

As governments and central banks, particularly in the United States, work hard to decrease unemployment and increase wages, companies will be able to raise prices and grow their revenue, Harnett explained.

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"We take this as a big opportunity to get back into the market," he noted. "Equities are strongly favored over bonds. Policy is geared towards equity investors rather than bond investors."

A 20 percent gain by the S&P 500 from its close Thursday at 1,878.61 would put the index at 2,254.

After the distractions of Ukraine's turmoil, the slump in emerging markets and the drop by technology stocks, investors will return to focusing on fundamentals, Harnett stated.

Many investors are bullish on stocks, but the Ukraine situation is keeping them cautious. "The market is biased from all of the good news we've heard on stocks recently to go higher," Kim Forrest, senior equity research analyst at Fort Pitt Capital Group, told Reuters.

"However, there are hot spots in the world that keep flaring up like a campfire that won't go out, and the market needs to deal with that."

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InvestingAnalysis
The S&P 500 and Dow Jones Industrial Average are both within 1 percent of their record highs, but that won't prevent further gains for stocks, says Ian Harnett, a European analyst at Absolute Strategy Research.
Harnett, stocks, 20%, policy
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2014-57-25
Friday, 25 April 2014 09:57 AM
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