Tags: JPMorgan | Lee | S&P

JPMorgan’s Lee Sees S&P Up 13 Percent by Year-End

By    |   Tuesday, 29 Nov 2011 08:01 AM

The U.S. stock market may have dropped in seven of the last eight sessions, but Thomas Lee, chief equity strategist at JPMorgan Chase, sees equities bouncing back quickly.

The Standard & Poor’s 500 Index will reach 1,350 by year-end, a 13 percent increase over Monday’s close, he predicts. Strong corporate earnings will spark the advance, Lee tells Yahoo.

“The big story is corporate profits and how they’re really decoupling from the situation in Europe,” Lee says. He sees earnings of $105 for the S&P 500 next year.
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In addition, “Treasurys are telling us the market is really cheap, and corporate bonds at 4 percent yields are telling us the P-E [price-to-earnings ratio] is too low,” Lee says. The result: “I think you’re going to see a P-E expansion into year-end,” he says.

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(Associated Press photo)
Lee’s forecast assumes Europe is able to manage its debt crisis. “As long as Europe doesn’t get too much worse I think the market can still rally in the face of that.” European nations are more committed to economic union than many Americans realize, he says.

While U.S. stocks surged higher Monday, as investor worries about Europe ebbed, those concerns won’t go away, experts say. And that may prevent further gains for the market.

"Unfortunately, these rallies are short lived until real dollars or real euros are injected into the financial system," Chad Morganlander, a portfolio manager at Stifel, Nicolaus, tells Reuters.



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The U.S. stock market may have dropped in seven of the last eight sessions, but Thomas Lee, chief equity strategist at JPMorgan Chase, sees equities bouncing back quickly. The Standard Poor s 500 Index will reach 1,350 by year-end, a 13 percent increase over Monday s...
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2011-01-29
Tuesday, 29 Nov 2011 08:01 AM
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