11:20 ET
DJ Goldman's Cohen Sees Signs For Investors To Buy
29 Apr 11:20
By Karen Talley
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Stocks are falling, but Abby Joseph Cohen, Goldman
Sachs' chief investment strategist, says the pendulum is preparing to swing the
other way.
"The basics are sound," Cohen said in the note issued Monday. "The U.S.
economy is recovering and profits should soon follow."
She stands by her year-end price target of 11300 for the Dow Jones Industrial
Average, now trading at 9920, and 1300 for the Standard & Poor's 500 Index, now
trading at 1075.
Cohen especially likes small and mid-caps right now and favors energy,
financial, industrial and information technology stocks. She recommends
underweighting consumer staples, health care and utilities.
In fact, the planets could fully align in the coming months, Cohen said.
Investors should expect evidence the economic recovery is sustainable,
inflation is remaining tame, the Federal Reserve isn't rushing to raise
interest rates and renewed demand is improving profit margins.
But Cohen does acknowledge there are some uncertainties that could be keeping
investors cautious. These include the pace that other countries' recoveries,
the Middle East and the fact that chief executive officers are pretty downbeat.
"Stronger capital spending and growing payrolls" would really please
investors, she wrote.
Certainly there is ample money out there for investing in stocks Cohen said.
"Cash ratios are strong in equity-oriented mutual funds and assets under
management in money market mutual funds are at record levels," while margin
debt has declined.
-By Karen Talley, Dow Jones Newswires; 201-938-5106;
karen.talley@dowjones.com |
