Around She Goes, Where Will She Close (S&P 500)
Now that we are approaching the half year point, its time to gaze into the crystal ball on where the markets will be both in the short and moderate long term.
Morgan Stanley ups their S&P 500 year end target;
Raises S&P 500 .SPX year-end target to 900 from 825
This is very close to what I have been thinking as I believe that the S&P 500 will finish the year essentially flat from the 2008 year end close of 903 but well higher from its low close of 676 in March and higher than the inauguration day close of 805.
Abbey Joseph Cohen has a six to twelve month outlook;
our six-to-12-month S&P outlook is 950 to 1,050.
By September 30, 2010, before the mid year elections, I anticipate the S&P to be at 991 or higher. The Democrats will ask if you are better off today than when Bush left office. That will be an extremely effective message. The Republicans will have to position themselves as the party best equipped to “preserve and nourish the growth.”
In the 2011 off election year, I could easily see the S&P closing at 1,060 or higher.
Prior to the 2012 election, I fully envision the S&P to be at 1,168 or higher. The surrogates for Obama will ask if you are better off today than when Bush left office. If my prediction of the S&P 500 holds and the index is at 1,168 or higher on September 30, 2012, barring some major personal disaster, I predict Obama will win a convincing re-election, all by default.
Equity fund managers that have a history of consistently beating the S&P 500 will reward their clients well during this period, as they always have.
Poorer fund managers? Well they will continue to reward themselves with fees and commissions.
Investors that were influenced by political rhetoric, and bailed on the market in March of this year, will sorely regret their decision by November 2012. I am extremely confident of that.
The US Dollar? Between now and 2012, the Dollar will revert back to where it was trading against other major currencies in the summer of 2008. Call it a decline if you like, but it is a correction back to where things were.
On the bailout money? I think the Federal Government will recoup far more money than anyone ever anticipated by selling off the stock and warrants that were acquired. The premise of zero recoupment was ludicrous.
Inflation over this particular time period through 2012? No higher than the long term average of 3.42%.
So where will she close?
And what are the political implications?
I have laid out my marker and wait the judgment that will come with time.
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June 17th, 2009 at 12:54 pm
I predict Armageddon will happen in five minutes. I’m putting the exact same amount of research into my prediction as you. I just love when people make predictions without any underlying analysis besides wishful thinking to back it up.
[But wait, you and your fellow travelers put tremendous stock into the predictions of depression style deflation, zimbabwe style inflation, the market collapsing and all sorts of other conclusions. Again, I have put down in a single diary what I can see based on reading analysts who probably (I hope) do not have a political ax to grind. That said, how is everyone doing that bailed when political operatives declared the Obama Bear Market?
Could we be on our way to massive 1930s deflation? Maybe
Could we be on our way to massive zimbabwe style inflation? Maybe, but I find it odd that right wing political blogs can tout both of these items at similiar times.
These very blog, has a written history of touting market gains and when that was done, it was cheered. I cheered along with everyone else.
I will always cheer when American markets go up. But you have to understand what that represents to me. Peoples mutual fund, 401K, equity IRA and brokerage statements represent their hopes and dreams for retirement, education and other things. Every upward jump is good news to millions.
Concerning the collapse of the markets, I rightly blame George Bush and the GOP who controlled congress to allow the regulatory system to get in the manner it did to allow this.
BUT, I give tremendous respect to George Bush, who stopped the economy from falling off the edge.
I give zero credit to Obama and the Democrats for the current round of stimulus as they are not helping anything short term and may cause long term problems. The GOP should do its best to explain the long term consequences and why it is not needed in the short term.
So guess what, I have faith that the American Economy is greater than any single individual. Rush USED TO say things like that.
OL]
June 17th, 2009 at 2:09 pm
Oak Leaf would be proud of Rep. Candace Miller from Macomb County Michigan since she voted for the War Supplemental bill yesterday. She defended that vote by saying she agreed with 95% of the bill. However, she failed to point out that International Monetary Fund spending plus releasing outrageous defense photos more than compensated that to vote no on the bill. If the total appropriations were in one bill and within $150 Billion of her target (who knows what the current gov’t real spending amount is since the Annointed One has cooked the books on the economic numbers?, for this example I assumed $3 trillion), she could vote for it. For me $150 Billion is a ton of money. So she lost my vote to be Michigan’s Governor (she is suppose to run for that office in the next election) since she is a RINO for me now.
June 17th, 2009 at 2:10 pm
Just curious if we do sex jokes on David Letetrmen and the Clinton family on here, will we get banned on here for doing that?
[I can only comment on the diaries that I write. If it is on mine, I will first delete and then might ban. If it was on someone elses, I write the co-blogger and they will have to decide. OL]
June 17th, 2009 at 2:17 pm
What will the S&P 500 matter? Unemployment will still be over 10% and inflation will be in full swing. Interest rates will be on their way up and we will be seeing the beginnings of the Obama spendding induced second recession. What will the S&P 500 matter ? The tax bills for all this wasteful spending will be going out. What will the S&P 500 matter? When people find their good corporate privided health care is dropped so that they can enrol in the new government mandated rationed care system. What will the s&P matter? Noticed the chinese dumping our bonds? No one wants to lend us any more money. Noticed that this economy and the government response is almost exxactly tracking the fall into the great depression?
[It will matter for tens of millions. Everyone that has saved money for countless reasons will think it matters a great deal.
I PRAY everyday that interest rates go up. Higher interest rates mean a greater demand for money and that is good!! That means the economy is expanding. Higher interest rates also reward SAVERS who are in cash.
Today, interest rates have been held down by governments and that represents a TAX on those that saved to give away to those that did not save.
OL]
June 17th, 2009 at 2:25 pm
Eddie Bauer is declaring bankruptcy:
http://articles.moneycentral.msn.com/Investing/Extra/Eddie-Bauer-files-for-bankruptcy.aspx?GT1=33002
So let the good times roll LOL!!!!
June 17th, 2009 at 2:45 pm
Oak Leaf:
“The US Dollar? Between now and 2012, the Dollar will revert back to where it was trading against other major currencies in the summer of 2008.?
With trillions of dollars being printed? Good God, man, are you out of touch.
Perhaps you should go short on gold and oil and show us how smart you really are.
Ken
Dallas
[Some people do not read. I am not a gold bug. That is a unique item. The gold I own is a small percentage and in coins that I like to look at and hold because of the history. Guys that make money in gold have to trade the commodity or speculate in the mines. Many are good at it, just not my thing. I do know that buying the raw bullion has not been the greatest investment over time.
Most of my investments are in mutual funds. That is a personal choice to stay away from large holdings in single stock issues. I do own some oil mutual funds because oil can only go up as the economy improves. I am bullish on oil for that reason.
I do not believe in short selling and think the activity should be curtailed. Short sellers "borrow" stock to sell short that is held by long investors in mutual fund accounts. The winner is the brokerage firm.
OL]
June 17th, 2009 at 3:36 pm
According to OakLeaf, federal overspending and overprinting of money will not have a negative effect on the economy, and the S&P will consequently rise to give Obama a handy reelection in 2012. Here’s my advice, Oak. Build a time machine, go back to 1930, and tell Herbert Hoover this. You can spare the country the Great Depression if you do!
[I have read numerous analyst reports and laid down in writing where I think things are going based on what I have read. Other analysts disagree.
On December 31, 2009 I will be judged.
On September 30, 2010 I will be judged.
On December 31, I will be judged.
On September 30, 2012, I will be judged.
You are free to put down in hard terms where financial markets are heading. You do not even need to peg a certain number. Just put a number and state above or below.
Or you can just say life sucks and Obama is a socialist.
OL]
June 17th, 2009 at 3:38 pm
Ron Paul interview today.
Paul says no discharge petition for HR1207.
June 17th, 2009 at 3:49 pm
More on the Khalid Shaikh Mohammed talking points that Cheney keeps using.
ACLU obtains papers from the CIA that disproves Cheney’s false assertions that the information gained through the torture program was useful. However, some information is still being withheld by the Obama regime..
During his 2007 hearing at Guantanamo, in very broken English Khalid Shaikh Mohammed says, quote, “I make up stories, just location, Osama bin Laden, where is he? I don‘t know. Then he torture me. Then I said, ‘Yes, he‘s in this area.‘”
This is the opposite of what Bush and Cheney are saying.
GEORGE W. BUSH, FMR. U.S. PRESIDENT: Once in our custody, KSM was questioned by the CIA using these procedures. And he soon provided information that helped us stop another planned attack on the United States.
RICHARD CHENEY, FMR. U.S. VICE PRESIDENT: The information we‘ve collected from the detainees, from people like Khalid Shaikh Mohammed, the mastermind of 9/11, has probably been some of the most valuable intelligence we‘ve had in the last five years.
June 17th, 2009 at 3:50 pm
I wonder if we had anything to do with the torture of Khalid Shaikh Mohammed’s children?
June 17th, 2009 at 3:59 pm
Paul on Bloomberg financial today too
June 17th, 2009 at 4:10 pm
The New York Stock Exchange’s Sarah Palin Shrine
June 17th, 2009 at 5:04 pm
Oak Leaf, you will always be an idiot. I don’t think I could say that about very many people at all. You may be the world’s biggest idiot.
[On each of the appointed days, I am sure you will have some witty missive to write then. OL]
June 17th, 2009 at 5:05 pm
Wes, ditto your comment #1. I think that is why I read Oak’s post and immediately thought, what an idiot.
[You are a political hack, I am not. It frightens you that everything I wrote may end up being correct. You fear that the markets will grow on the watch of Obama. You fear that TARP money is getting paid back. Unlike yourself, I can put aside Obama and say that I am very happy that millions of people will see positive investment statements this semi-annual period. Tens of millions of Americans that were afraid to open their statements in January will open their statements without fear in July. That is indeed good. OL]
June 17th, 2009 at 7:06 pm
You guys should be thanking the dreamer for the comedy relief.
[Then put down in writing where the markets are going to be on these appointed days. OL]
June 18th, 2009 at 2:56 am
The best part is where you quote one of the legendary promoters of the internet bubble as if she had credibility.
June 18th, 2009 at 6:30 am
Oak is the new Tokyo Rose.
June 18th, 2009 at 8:11 am
In response to today’s “mixed employment data,” showing a drop in continuing unemployment claims a poster wrote:
“You fail to mention why jobless claims fell-are people going back to work in the form of job creation or are they giving up, staying unemployed but no longer receiving benefits so they don’t show up in the ranks? It’s the latter- get in touch with Main St….”
This is but one example of how people can look at economic signals and interpret them according to their own “glass is half empty or half full” philosophy.
OL, I believe is reporting accurately on the data he is putting out, demonstrating to him that an economic recovery is at hand.
However, those who disagree with him are also right, as the economy is still very erratic, showing the non-transparacythat is going on in the WH, giving the impression it is the manipulation of money which is creating a recovery-like atmosphere, not an actual recovery due to greater health in our finances.
As to the positive shift in our financial statements from January to now — it is all paper money and can disappear as fast it has reappeared, if it not genuinely backed by anything. Roubini says to brace for a double-dip recession…so, OL that means maybe in another 6 mos that statement is going to be looking pretty glum again.
January 6th, 2010 at 2:17 pm
nice article……..