Cohen: No recession here
Wall Street's famed bull remains upbeat;
sees S&P 500 at 1200-1250 in a year
October 21, 1998: 9:22 p.m. ET
Cohen invited to
join GS elite - Oct.
20, 1998
Cohen raises Dow
forecast - March
17, 1998
CNNfn Markets
Goldman Sachs
NEW YORK (CNNfn) - Unabashed and unbent in
the face of dire market talk, famed Wall Street
stock bull Abby Joseph Cohen said Wednesday
she remained confident investors could expect
"fairly notable gains" in the Dow Jones over the next
12 months as undervalued equities claw their way
back to respectable levels.
"I would still buy at this point because I am
making one principal assumption: There is no
recession on the horizon for the United States,"
Cohen told CNN's "Moneyline News Hour with Lou
Dobbs."
"The economy will be growing more slowly, but it
will be growing, new jobs will be created and we
think profits will increase as well," she said.
Though already lionized by a major national
magazine as the "prophet of Wall Street," Cohen's
remarks Wednesday carried an added whiff of
authority following her elevation a day earlier by
Goldman Sachs to full partner. Her ascension came
as 56 other managing directors also were promoted
to full partnerships.
Cohen has attracted kudos and critics on Wall
Street for sticking with her bullish forecasts even as
markets buckled across the globe. Before
Wednesday she had set year-end targets of 9300
for the Dow Jones industrial average, 1850 for the
tech-heavy Nasdaq, and 1150 for the Standard &
Poor's listing of 500 widely traded stocks.
On Moneyline, Cohen asserted that due to
"something of a rally over the past month," the
stock market may not be as undervalued now as it
was at the end of September, when Goldman
Sachs suggested equities were as much as 15
percent below their fair value.
She predicted the Dow would be notably "higher"
a year from now, without venturing any numbers,
and that the S&P 500 would hover in the 1200 to
1250 range within the next 12 months.
Cohen said especially good bargains could be
found in technology and financial service stocks,
many of which were pummeled in the recent
downturn.
"Over the past several months," she said,
"earnings of technology companies have already
been very hard hit and, if anything, we think some of
these companies are now likely to see a
reacceleration in the coming months. We see that
in semiconductors, we also see that in some of the
larger companies in the PC and computer area."
Regional banks, whose exposure to battered
international markets is minimal to nil, also are
attractive, Cohen said.
She warned, however, that sectors that rely on
the global economy, such as commodities, may
have a more difficult time weathering the current
doldrums.
Energy stocks, she noted, may be a possible
exception. "If crude prices are near their trough,
earnings should start to flatten out and move up,"
Cohen said.
Cohen also voiced confidence in the ability of the
Federal Reserve to provide any extra fillip the
economy may need to ride out the present volatility.
"I think the Federal Reserve will do what it feels
it needs to do," she said. "The interest rate cuts so
far have been an important signal to the financial
markets letting us know that the Fed is being very
watchful. And if there are signs that the economy
perhaps is weaker than we are expecting, we do
think the Fed has plenty of flexibility to step in
again." |
