What do the analysts think about 2008 … (U.S. markets)

Another year … another outburst of analyst expectations … the end is often … most of them are plain WRONG

2007 expectations have not been far off the real outcome … AND THIS WITHOUT KNOWING THE SUBPRIME IMPACT … which means … without that, markets would have performed by FAR BETTER than analysts expected …

Now let’s take a look at some of their forecasts for 2008 … (you can read them in full in the new issue of Businessweek)

Most of them see markets rising … especially in the second half after a difficult first half … AND … even the Bulls maintain a very defensive stand with big cash and bond positions.

HMMM … First let me highlight some points … then my own opinion (without looking at the charts)

LEO GROHOWSKI, Chief Investment Officer, BNY Mellon Wealth Management
He was the best for 2007 …
His calls … DJIA: 14,800 S&P 500: 1675 … sees HIGH VOLATILITY and thinks, H1 down, H2 up

THOMAS McMANUS, Chief Investment Strategist, Banc of America Securities
His calls … DJIA: 14,700 S&P 500: 1625 … sees H1 down (around 3%), H2 up … sees recession as highly possible

DAVID BIANCO, Chief U.S. Equity Strategist, UBS Investment Research
His calls … DJIA: 15,250 S&P 500: 1700 … advises caution for the moment … sees time nearing to buy BANK sector, sees high tech and exports driving markets

WILLIAM GREINER, Chief Investment Officer, UMB Financial
One of the TOP analysts of the last years …
His calls … DJIA: 14,400 S&P 500: 1520 … sees stocks falling on slower growth in H1 … than on lower interest rates and predidential election up in H2

TOBIAS LEVKOVICH, Chief U.S. Equity Strategist, Citigroup
His calls … DJIA: 15,100 S&P 500: 1675 … recommends financial stocks … like his collegue from UBS (insider buying? ) … BUT sees market up in H1 close to 20(!)% … than coming down a bit on unsecurity about election and rising wages … I like that opinion!

JASON TRENNERT, Chief Investment Strategist, Strategas Research Partners
He was one of the best market strategists by Institutional Investor magazine in the last 5 years …
His calls … DJIA: 15,150 S&P 500: 1680 … sees Techs gaining on a weaker dollar … BUT sees U.S. outperforming Europe in H2 as ECB will lower rates and dollar rebounds …

RALPH J. ACAMPORA, Director of Technical Studies, New York Institute of Finance
One Bull Market Calls “Legend” … A Chartist
His calls … DJIA: 13,800 S&P 500: 1530 … favorite sector Techs … sees after a small upmove due to the January effect a 10 to 20% DOWNMOVE for H1 … than back up again on election and stabilizing economy

STUART T. FREEMAN, Chief Equity Strategist, A.G. Edwards & Sons
He won the Businessweek contest in 2006
His calls … DJIA: 14,440 S&P 500: 1575 … he sees a 10% bearmove in H1 … than up in H2 … thinks stocks are undervalued … sees growth in the “rest of the world” slowing and thinks, U.S. markets should outperform …

ELAINE GARZARELLI, President, Garzarelli Capital
The “godess” of the 1987 stock market crash … She is BULLISH
Her calls … DJIA: 16,000 S&P 500: 1780 … actually the biggest BULL of all analysts asked … sees stocks undervalued by 25% … recommends to be 100% invested in stocks … recommends financial stocks …

BEN INKER, Director of Asset Allocation, GMO
Known for its good views during the last bear market … he is bearish
His calls … DJIA: 13,000 S&P 500: 1440 … sees stocks wrongly and too high valued … puts only 3(!!!)% of his asset allocation in U.S. stocks …

ROBERT ARNOTT, Chairman, Research Affiliates
His calls … DJIA: 12,500 S&P 500: 1350 … Bearish, puts only 20% into stocks … sees superb recovery of financial stocks in H2 … recommends commodities and TIPS as an inflation hedge … sees wage pressure and therefore shrinking margins as well as trouble from the consumer as housing problems deepen (I would have expected that to be the common opinion, what a surprise that it is not)

LASZLO BIRINYI, President, Birinyi Associates
His calls … DJIA: 15,000 S&P 500: 1700 … sees market neutral valued … sees pockets of value as Google, Deere, some retailers and AIG … thinks, problems are that obvious, market participants that cautious, that FED will be able to do the right steps …

BERNIE SCHAEFFER, Chairman, Schaeffer’s Investment Research
Known for his contrarian approach and one of the best market timers of the last decade (Do you already feel my respect for him?)
His calls … DJIA: 15,300 S&P 500: 1700 … puts 80% into stocks … sees AGGRESSIVE CUTS by the FED … sees market as to bearish and so less vulnerable to bad surprises

Ok that’s it … interestingly a lot of bulls … in an obvious difficult environment …

After reading all this … my thoughts are as follows:

1. As too many people expect markets to be down in H1 and up in H2 … what about THE OPPOSITE!!! I see markets rise in H1 than plummet in H2 as FED moves will be limited, inflation will still be there and problems don’t go away …

2. As I especially value the opinions of the MOST BULLISH (surprisingly bullish) advisors here … what about reaching or topping these targets in H1 … then reversing all of it and even more?

3. I like the idea, buying the financials as expectations are low and every institution seemingly has a chinese or arab BID for it … BUT as I am aware of the Level 3 exposure and know, what derivatives are … I KNOW, that they could be ALL JUST BANKRUPT !!!! … so a case for CALL BUYING???

4. As too many analysts are very cautious and buy bonds (already)… what about plummeting bonds on rising inflation???

5. NONE of them mentioned ASIA … So China and India have still a long way to go? Remember … everybody wants to be out of China before the Olympics … so before underperformance, then SQUEEZE? So first repatriation of dollars, then back into Asia? Falling Dollar in H2???

If you have different ideas … please let me know … Oliver1414@gmail.com … or just here

Tags: 2008, Business Week, Dow Jones, forecasts, outlook, S&P

This entry was posted on Samstag, Dezember 22nd, 2007 at 22:54 and is filed under FDAX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.