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2013 S&P 500: Analysts Predict How High It Will Go


The index is poised to have a strong 2013, but nobody can seem to agree just how strong. Canaccord Genuity's Tony Dwyer estimate is the highest.

MINYANVILLE ORIGINAL Lots of people got hit pretty hard in 2012 in one way or another, and they'll spend 2013 rebuilding: Long Island residents, the right wing of the Republican party, the New York Mets. But plenty of signs point to 2013 being a big year for the S&P 500 (INDEXSP:.INX).

While many analysts are predicting that the index will smash its record highs, they disagree about the extent of the record-smashing.

Big name strategists Tobias Levkovich of Citigroup (NYSE:C), Savita Subramanian of Bank of America (NYSE:BAC), and Brian Belski of Bank of Montreal (NYSE:BMO) have predicted highs of 1615, 1600, and 1575 respectively.

Minyanville contributor Steve Smith, though, has been more cautious, warning, "[While] the market's recent rebound off of the post election sell-off has been fairly impressive…it should be noted that it has been on historically light volume." Smith cites the 1415 mark as a crucial barrier that the index has neither cleared nor closed above.

Canaccord Genuity analyst Tony Dwyer, however, believes that while Smith has a point, a few factors could contribute to the S&P 500 going even higher than Levkovich's prediction.

"Before the index goes above 1415," Dwyer says, "it will retest the low at 1380. But levels are not as important as they once were." Dwyer cites strong credit markets, fundamental economic and earnings re-acceleration, and a continued uptrend for all markets as reasons that the index could rise as high as 1650, a prediction he makes for the end of 2013.

Dwyer's report also claims that consumer confidence is rebounding well after an all-time low and that lending standards are increasingly conforming to the shape of strong post-recession recovery patterns. If these patterns hold, the S&P 500 could surf the recovery wave to highs that some analysts don't dare project.
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