Goldman's Cohen Says Bull Market Has Begun

Goldman Sachs Senior Investment Strategist Abby Joseph Cohen says Goldman believes we’re in a new bull market, and that the S&P 500 should be at 1050 to 1100 by year-end.

“We are beginning to see improvement, even in the labor market,” Cohen told CNBC. “We do think that the new bull market has begun. … [But] don’t expect it to look to look like a ‘V’; expect it to look like a series of upward steps.”

Cohen says that while employment won’t turn on a dime, the global economy is looking up. “Our sense is that things are now coming together, not just in the United States, but there are some other nations primarily in Asia where economic growth does seem to have resumed,” she said.

Cohen expects the third and fourth quarters will bring good economic data and good market news. Business equipment numbers are improving, unemployment figures are getting better, and many companies squeezed inventories down to unsustainable levels because of fear during the economic crisis, she says. Goldman expects about $75 in earnings per share for the S&P 500 next year, and the next two quarters will look “fabulous” compared to the horrible third and fourth quarters of last year, she says, adding that the S&P has shed some of the problem companies that dragged it down in past quarters.

Stocks will continue to be faced with problems, such as increased consumer savings rates, Cohen says. But she is optimistic, and says we should be in an environment in which stocks outperform bonds. She’s particularly high on sectors that would benefit from an economic recovery, like energy, technology, and financials.

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