Tags: Citi | Levkovich | Bull | Market

Citi’s Levkovich: 'Raging Bull' Market to Storm US

Monday, 19 Dec 2011 07:50 AM

Stocks are set to rebound like a "raging bull," as a housing recovery and greater energy independence blow additional winds in the sails of the next equities upturn, says Tobias Levkovich, chief U.S. equity strategist at Citi Investment Research.

Investors are still reeling from the housing bust and ensuing credit crunch and recession followed by a sluggish recovery, market volatility and zero price gains.

"The investment community is distracted by having lost 50 percent-plus in stocks twice since 2000, the plunge in home prices, peak-like profit margins, employment challenges and a potential European sovereign debt/banking crisis," Levkovich writes in a note, according to CNBC.
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"While we do not expect the markets to react to these drivers in the near term, their coalescence could generate a much more impressive rally over the next few years," Levkovich adds, pointing out the rally will come in 12 to 18 months.

 wallstreetbullap200v1.jpg
 (Associated Press photo)
Along with housing recovery and energy dependence, a manufacturing rebirth, improved fiscal policies and new demographics marked by a growing investor class in their late thirties will fuel gains.

Don't forget U.S. innovation, either.

"Every 15 years or so, the U.S. undergoes substantial technological change that can act as an economic propellant," Levkovich writes.

"The sheer magnitude of mobility growth brings computing, the Internet, purchasing and entertainment in one’s palm and argues for significant investment in software, infrastructure, bandwidth and more efficient chips, batteries and production techniques. Fortunately, the U.S. remains the global IT leader."

Still, don't expect the U.S. economy and markets to come roaring back right yet, other economists say.

"We expect the US economy to perform a bit better in 2012, but this will depend on policy decisions coming out of Europe and Washington," Mark Zandi, Chief Economist for Moody’s Analytics, says in an outlook statement.

"The Europeans are fighting to keep the euro area together, while U.S. policymakers are struggling to find an appropriate degree of fiscal austerity. While we believe these issues will be resolved in a reasonable way, there is a significant degree of uncertainty associated with this assumption."

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Stocks are set to rebound like a raging bull, as a housing recovery and greater energy independence blow additional winds in the sails of the next equities upturn, says Tobias Levkovich, chief U.S. equity strategist at Citi Investment Research. Investors are still...
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Monday, 19 Dec 2011 07:50 AM
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