Markets and S&P 500 Target Update From Lange Financial Services For Beginning Of February 2011. Bullish
Just in this evening from Fred and Rob at Lange Financial Services.
LANGE FINANCIAL SERVICES- UPDATE JANUARY 31, 2011 9:45PM
Market prospects remain excellent despite some possible near term consolidation and some mid east political concerns. Statistically, the market remains historically cheap. Goldman Sachs [GS] restated its earnings forecast of $96 and $106 for 2011 and 2012 respectively for the S&P 500 reducing to a price/earnings ratio of only 13 times earnings.
Today, ISI Group, the leading economics firm, raised their forecast for the S&P 500 earnings to $97 and $105 for 2011 and 2012. Other major investment firms have similar forecasts. We believed that these projections will prove conservative given a strengthening economy and rising profit margins. We are using $100 and $110 for this year and next. GS believes that the S&P will reach 1500, a target also in the sight of other investment firms by year end. Bank of America/ Merrill Lynch today stated– “Let the new bulls lead the charge above 1300: Our S&P target is 1400, but 1500 more likely”–.
In the past couple of weeks we saw some corrective activity in some of the other popular market indexes. While the S&P was only down 1.8%, the Russell 2000, the NASDAQ Composite, and the Dow Transports were down 3% to 4%. Some of the recent market favorites had corrections of 5% to 10% or more. Was this the correction everyone seemingly has been looking for?
We believe the S&P 500 Index will approach or exceed its all time high of 1550 by early 2012. A fully invested position is still strongly recommended, with new positions being added to and or accumulated during periods of weakness.