CSFB: 2001 forecast: S&P 500: 1600; Dow: 12,650; Nasdaq: 4000
Credit Suisse First Boston: 2001 Market Outlook
By: USA Today
12/29/00 9:08:46 AM
Source: USA Today
Market outlook: Don't fall in love with those safe stocks, such as energy and utilities, that have served you so well in 2000, says Tom Galvin, chief investment officer at Credit Suisse First Boston.
Defensive stocks will step aside in 2001, as investors ''become aggressive again'' and start investing in technology stocks, he says. ''The real world is not as bad off as the stock market makes it appear,'' Galvin says.
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Although it's hard to deny 2000 was a bruising bear, Galvin says bad markets don't last as long as they used to. ''We live in the information age,'' he says. ''Our economic lives have been contracted to short boom and slowdown periods.''
While there's a pileup of goods from slower demand, that inventory problem should be sorted out by April or May, Galvin says. ''We're in the fifth inning of a nine-inning inventory correction process,'' Galvin says. ''That's going to yield opportunity when it improves.''
Galvin expects blue chips and the Standard & Poor's 500 to post strong 20% gains in 2001. Valuations, he says, are at three-year lows. And once the economic slowdown simmers, companies will start to post ''stable'' earnings growth. Technology, financial and telecom stocks will be the place to be, he says.
2001 forecast: S&P 500: 1600; Dow: 12,650; Nasdaq: 4000
Top stock picks: Nokia, Applied Micro Circuits, Celestica, McLeodUSA, Morgan Stanley Dean Witter
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