Just about every Wall Street strategist is bullish on stocks for 2007. But there's no consensus on which sectors will provide the best returns amid uncertainties about the economy, the Federal Reserve and corporate profits -- not...
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Just about every Wall Street strategist is bullish on stocks for 2007. But there's no consensus on which sectors will provide the best returns amid uncertainties about the economy, the Federal Reserve and corporate profits -- not to mention geopolitics. For example, PNC Advisors' Jeffrey Kleintop likes tech and health care, while Citigroup's Tobias Levkovich prefers tech and consumer discretionary stocks. Prudential Equity Group's Ed Keon would still bet on financials, while T. Rowe Price's Larry Puglia would choose biotech and acquisitive mega-caps. (See the table below for details.) The dichotomy of opinion suggests strategists and prognosticators are confronting dueling fears: If investors don't take risk, they'll miss out on the best returns. But at the same time, the consequences of a quick reversal in the liquidity landscape or market sentiment could be dire. The markets suffered such a reversal in April and May, when investors retreated from risky investments after Japan pulled the plug on its accommodative quantitative easing policy. In all, strategists are optimistic about next year's stock market returns, putting the S&P 500 anywhere between 1500 and 1630 next December -- or 5% to 14% above 1425, a level the index reached multiple times in December. Many pundits suggest that investors ride the wave of liquidity and low volatility by buying aggressive growth stocks. "Liquidity is increasingly recognized as 'the' defining force in the economy," writes James Paulsen, chief investment strategist at Wells Capital Management, which had more than $180 billion under management as of Sept. 30. Paulsen believes the S&P 500 will soar through the first half of the year, topping out with the S&P 500 at 1675. He then sees the economy overheating a bit and the S&P pulling back to finish the year at 1550. But even optimists such as Merrill Lynch's U.S. sector strategist Brian Belski are restrained in their ebullience.
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For example, PNC Advisors' Jeffrey Kleintop likes tech and health care, while Citigroup's Tobias Levkovich prefers tech and consumer discretionary stocks. Prudential Equity Group's Ed Keon would still bet on financials, while T. Rowe Price's Larry Puglia would choose biotech and acquisitive mega-caps.
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Comments (1)
From the list : Stock Market '06 by mona_moolah
For example, PNC Advisors' Jeffrey Kleintop likes tech and health care, while Citigroup's Tobias Levkovich prefers tech and consumer discretionary stocks. Prudential Equity Group's Ed Keon would still bet on financials, while T. Rowe Price's Larry Puglia would choose biotech and acquisitive mega-caps.
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