Cohen - Drop in Yen Finished.............
GOLDMAN'S COHEN: US STOCKS UNDERVALUED; STICKS BY DOW 9,300
--Also Says Drop in Yen is Finished; Yuan, HK$ not to be devalued
ÿÿÿÿÿNEW YORK (MktNews) - U.S. stocks are undervalued and are at the bottom end of a persistent trading range, according to the latest analysis from Goldman Sachs guru Abby Joseph Cohen.
ÿÿÿÿÿSticking by her prior forecasts, Cohen told clients Thursday morning that she has made no changes in price targets for the Dow or S&P 500.
ÿÿÿÿÿ"Relative stock price performance has not matched fundamentals in recent weeks, creating opportunities," she said. Cohen cited favorable expectations for U.S. profits, cash flow and inflation over the next year.
ÿÿÿÿÿShe said labor costs "remain under good control" as a "mild acceleration" in wages has been substantially offset by productivity gains.
ÿÿÿÿÿ"By year-end, we expect the following to be easily achieved: Dow Jones Industrial Average at 9,300, S&P 500 at 1,150. Our 12-month rolling target for the S&P is 1,250."
ÿÿÿÿÿCohen also expects no global recession in the coming year. "Our economic forecast continues to call for ongoing global growth. ... For the U.S., our Economic Research Group assumes a modest deceleration in domestic GDP, but no further deterioration of not in the trade balance."
ÿÿÿÿÿShe said the impact of troubles in Asia and Russia on the U.S. economy have and will continue to be "only moderate". She said the U.S. is largely insulated from international troubles, given that only 13% of GDP is directly related to foreign trade. She pegged the negative impact of Asia on U.S. GDP at 0.5%.
ÿÿÿÿÿFor currencies, Cohen said most of the decline in the Japanese yen has already occurred and that the Chinese yuan and Hong Kong dollar will not be devalued. She provided no further explanation.
13:13 EDT 08/13
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