Tags: Wien | bullish | year | stocks

Byron Wien: 'I'm Still Out There Bullish for Rest of Year' on Stocks

By    |   Friday, 20 February 2015 10:35 AM

The six-year bull market for stocks, which saw the S&P 500 index hit a record high Tuesday, is alive and well, says Byron Wien, vice chairman of Blackstone Advisory Partners.

"I'm still out there, bullish for the rest of the year," he told CNBC.

"Earnings may be somewhat disappointing because of the strong dollar and oil, but I think there are going to be a number of companies that are going to produce good year-to-year earnings. And I think there are opportunities to make money in the market."

The 391 S&P 500 companies that reported fourth-quarter earnings through last week registered blended profit growth of only 3.1 percent, FactSet reports.

"My view is that the people who are cautious make sense," Wien said. "But I think that too many people are moving to that side of the boat, and I think the market may surprise you favorably."

Wien sees stocks gaining 10 percent this year, with multiples expanding on flat earnings. A 10 percent increase for 2014 would put the S&P 500 at 2,265, up from Thursday's close of 2,097.45.

"I don't think this is going to be a big year, but the market is not expensive," he said. The S&P 500 had a trailing price-earnings ratio of 20.44 last Friday, up from 17.60 a year ago.

Morgan Stanley analysts led by equity strategist Adam Parker are bullish too.

In a commentary obtained by MarketWatch, they say the S&P 500 index may climb 1,000 points by the end of 2018.

"We continue to think that hubris and debt define the top of every cycle and that these are unlikely to become problems this year," Parker said, according to MarketWatch.

He and his colleagues see room for inventories, merger activity and corporate spending to rise from below-average levels, thus boosting stocks.

In addition, "the dividend yield of the S&P 500 is well above nearly all government bonds, and payout ratios are quite low versus history," Parker said. "This, combined with buybacks of more than 2 percent net of issuance for the S&P 500 this year, ought to be a strong positive for equities."

The S&P 500 dividend yield stood at 1.96 percent Friday, compared to 1.84 percent for seven-year Treasurys.

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The six-year bull market for stocks, which saw the S&P 500 index hit a record high Tuesday, is alive and well, says Byron Wien, vice chairman of Blackstone Advisory Partners.
Wien, bullish, year, stocks
369
2015-35-20
Friday, 20 February 2015 10:35 AM
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