Tags: Wien | stocks | market | earnings

Wien: Stock Market 'Is Not Overvalued'

By    |   Wednesday, 12 March 2014 10:48 AM

Stocks will likely remain range-bound in the first half of the year and then rise in the second half amid strong earnings growth, says Byron Wien, vice chairman of Blackstone Advisory Partners.

"I think the market's going to flutter around a little bit here in the first half, but I think it's going to be relatively strong in the second half. And I think this year is going to end up surprising people favorably," he tells CNBC.

Wien stands by his earlier forecast that the Standard & Poor's 500 Index will produce a total return of 20 percent this year.

Editor’s Note:
18.79% Annual Returns . . . for Life?

"The market is going to go higher," he notes.

Rising GDP growth will boost earnings, Wien says. He expects economic growth to approach 3 percent, given the recent strength of railcar loadings and bank loans.

"That could be very good for earnings," he argues. "I think earnings have been cut too far by analysts. I think earnings are going to be better than expected."

He also likes stocks based on valuations. "The market is selling just slightly above the long-term historical mean or median, so stocks aren't expensive," Wien notes.

"You would think five years into the recovery, with the market having gone up from 666 to 1,850, that the market would be overvalued. But it isn't. It's reasonably valued. And maybe somewhat overbought here. But it is not overvalued here."

Other market participants are bullish on stocks for the short term too. "The equity market is going to make continued progress in a two-steps-forward, one-step-back kind of progression," Jim Russell, senior equity strategist for U.S. Bank Wealth Management, tells Bloomberg.

"We're still evaluating how much of the economic weakness is weather related and how much of it is legitimate."

Editor’s Note: 18.79% Annual Returns . . . for Life?

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InvestingAnalysis
Stocks will likely remain range-bound in the first half of the year and then rise in the second half amid strong earnings growth, says Byron Wien, vice chairman of Blackstone Advisory Partners.
Wien,stocks,market,earnings
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2014-48-12
Wednesday, 12 March 2014 10:48 AM
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