Tags: Stock | Prognosticator | Gains | 2014

Prognosticators Foresee More Stock Gains in 2014

By    |   Thursday, 05 December 2013 07:11 PM

History favors another profitable performance for stocks in 2014, in part because annual rich gains like the market has enjoyed this year are usually followed by a succeeding strong year, according to Jonathan Krinsky, chief market strategist at MKM Partners.

Krinsky told Yahoo Breakout that both technical signs and market fundamentals point to a continued positive outlook for stocks.

“The breadth is good, the trends are good, the momentum is good, sector leadership is good. So that would bode well for a further outsized year as opposed to any major downside move,” he predicted.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

Krinsky said that not only is the S&P 500 up about 25 percent in 2013, but it followed a strong 2012 that itself finished up about 13 percent. Since 1928, there have been only four years in which a 25 percent gain followed such a strong prior-year performance, he noted.

Yahoo Breakout said he wrote in a recent report: “Overall, following an up 25 percent year, the following year is higher 66 percent of the time, for an average move of +5.47 percent.”

In another 2014 outlook, S&P Capital IQ is forecasting the benchmark index will end at 1,895 next year, which implies a similar 5 percent price gain from recent levels.

“We also believe 2014 could be one of those years in which the S&P 500 is up for the entire year, but has to suffer through a pullback of at least 5 percent to 10 percent, and more likely a correction of 10 percent to 20 percent, before ending the year higher than where it started,” said Sam Stovall, chief equity strategist at S&P Capital IQ.

Kiplinger likewise predicted more gains for stocks next year.

“Given expected earnings growth of nearly 10% in 2014, we think stock prices could rise that much and perhaps more if investors again prove themselves willing to pay more for each dollar of corporate profits, ratcheting up the market’s price-earnings ratio,” Kiplinger estimated. “A reasonable range to expect would be 8% to 12% returns.”

In its 2014 outlook, LPL Financial Research predicted stock market gains of 10 percent to 15 percent.

“In 2014, there may be more all-time highs seen in the stock market and higher yields in the bond market than we have seen in years as economic growth accelerates,” LPL Financial forecasted.

LPL Financial, one of the largest independent broker dealers in the U.S., estimated the biggest risk to 2014 stock gains will not be the antics of Washington lawmakers or the machinations of the Federal Reserve, but rather if growth in the economy and in corporate profits simply do not materialize as expected.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

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History favors another profitable performance for stocks in 2014, in part because annual rich gains like the market has enjoyed this year are usually followed by a succeeding strong year, according to Jonathan Krinsky, chief market strategist at MKM Partners.
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2013-11-05
Thursday, 05 December 2013 07:11 PM
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