Stocks Show Americans Better Off With S&P 500 Cheap to World – Bloomberg 09-17-12

Salient to Investors:

The S&P 500 Index is up 82 percent since Obama took office, closer to its all-time high than any other stock markets, and at 14.9 times reported earnings, the biggest discount to MSCI’s global measure since March 2010, and 9.1 percent below the five-decade mean – the last two times the ratio was this low versus global stocks, in 2003 and 2009, gains in the S&P 500 lasted for at least three years. The S&P 500 has never stayed above 1,400 when the unemployment rate was this high.

Abby Joseph Cohen at Goldman Sachs says its most thoughtful clients are more confident, and America is dramatically better off than we were.

Jim Chanos at Kynikos Associates says the American economy and banking system are in better shape than others, and expects surprises will be on the positive side in the U.S. market. Chanos says recovery in U.S. housing and improving auto sales point to a strengthening economy.

Chris Hyzy at U.S. Trust expects growth in the US and the world will better than expected next year, and is bullish over the next three years.

Ryan Larson at RBC Global Asset Management (U.S.) said on Sept. 12 that these multi-year highs have come largely from stimulus accommodation from central banks.

Fidelity report the average 401(k) balance rose to $72,800 in Q2 from $62,400 in 2008.

Jeffrey Gundlach at DoubleLine Capital said last week that stocks won’t repeat the poor performance of 2000 to 2010.

Read the full article at

Trio of Strategists Agree S&P 500 to Reach Record in 2013 – Bloomberg 09-14-12

Salient to Investors:

Tobias Levkovich at Citigroup predicts the S&P 500 will hit 1,615 in 2013.

Brian Belski at Bank of Montreal predicts the S&P 500 to hit 1,575  in 2013.

Savita Subramanian at Bank of America expects the S&P 500 to hit  1,600, but straight up, in 2013 on record earnings, reduced concerns about the global economy, and high bearishness on Wall Street. Subramanian said economic growth could disappoint in half2 2012 and early 2013, adding to recession in Europe and decelerating trends in emerging markets.

Abby Joseph Cohen at Goldman Sachs said investors risk tolerance is improving but still not back to normal.

The S&P 500 companies have posted 11 quarters of earnings expansion.

11 of 12 analysts surveyed expect S&P 500 earnings above $100 a share in 2013

Charles Bobrinskoy at Ariel Investments said people like the idea of a Fed put, the idea the Fed will stand behind the economy and step in to intervene.

Hayes Miller at Baring Asset Mgmt says equity gains have gone too far too fast, and stocks will fall once investors realize profit margins have peaked and the Fed’s stimulus has driven most of the rally. Miller said QE3 is more artificial stimulation that kicks the can further down the road – we still have to work through excess debt that needs to be restructured, the fiscal cliff, and the fact that we have been on peak profits.

US stock mutual funds posted net outflows for a fifth year through 2011, the longest streak in data going back to 1984. Withdrawals have exceeded $80 billion this year.

Andrew Slimmon at Morgan Stanley Smith Barney sees capitulation buying by many investors with too much cash.

Read the full article at