Barrons: Still Bullish. Dow 15,000 Next Year
online.barrons.com
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ON WALL STREET, THE SUMMERTIME BLUES have given way to the fall blahs. The housing market is crumbling, the credit market is stumbling, and stocks are tumbling from the highs they reached last month.
Given this worrisome backdrop, it's no surprise America's money managers remain cautious about the investment outlook for the months ahead. Just 47%, or fewer than half of the professional investors who responded to our latest Big Money poll, say they are bullish or very bullish about the prospects for stocks through the middle of 2008, a reading nearly identical to last spring's level of bullish sentiment, but well below the 64% of managers who were bullish a year ago. Indeed, 55% of our respondents think the market is fairly valued at current levels, while another 22% consider stocks overvalued.
Bullish investors, on average, expect the Dow Jones Industrial Average to end the year at 14,318, above its Oct. 9 peak of 14,164 and about 5% higher than today's 13,595. While their mean prediction for June '08 is Dow 14,993, some 40% of Big Money managers see the industrials topping 15,000 by the middle of next year, including 8% who predict a close of 16,000 or more. The bulls' mean forecasts are up almost 10% from last spring's Big Money poll.
"We feel stocks are the best value out there relative to fixed income and cash," says Art Nunes, a portfolio manager with Portland, Ore.-based IMS Capital Management, which manages $760 million. "The August setback was merely a correction in an overall bull market. The longer-term trend for stocks is up."
Nunes expects the Dow to breach 15,000 this year and gain another 10% in the first half of 2008. He thinks the Standard & Poor's 500, now 1509, could jump to 1670 by Dec. 31 and 1830 by June. More gains are also in store for the Nasdaq Composite, which has rallied 16.4% year to date amid renewed enthusiasm for technology shares. Nunes' mid-'08 Nasdaq target -- 3200 -- is significantly higher than the mean Nasdaq prediction of the Big Money bulls, 2986... |
