Canaccord Genuity Morning Coffee on S&P 500: Portfolio Strategist Makes Bold Call

June 27, 2012 10:17 AM EDT Send to a Friend
Canaccord Genuity Morning Coffee on S&P 500: Portfolio Strategist Makes Bold Call

As seen on CNBC's Fast Money Halftime Report yesterday...20% Rally by Year-End?

YES, says Canaccord Genuity U.S. Portfolio Strategist Tony Dwyer. Dwyer's 2012 S&P 500 target remains 1575 (a very bold call), based on 15x $105 in operating EPS. Until this past year, periods of sub-3% core inflation suggested the equity market should trade at a "minimum" 15 multiple. The 2011 European Debt Crisis and subsequent drop in global equity markets continues to price in a recession that Dwyer continues to believe remains highly unlikely - even with renewed European Sovereign Debt fear. Dwyer says the "perception" of a settlement or a fix in Europe will go a long way for the markets. Dwyer believes investors should focus additional equity commitments into the Financial, Information Technology, and Industrials as correction progresses and further evidence of sustainable improvement in: 1) Consumer Sentiment, 2) Employment and 3) Housing emerges. In Dwyer's view, outside of a geopolitical shock, the risk in such a bullish fundamental outlook is a rapid and sustainable rise in interest rates. At this juncture, there appears to be very little evidence of that happening, especially with long-term interest rates reaching into new low territory.


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