Both Goldman Sachs and Stifel Nicolaus expect stocks to stagnate this quarter but rise later in the year.
Goldman Sachs sees a gain in the Standard & Poor’s 500 Index to a record 1,575, up 8 percent from Wednesday’s close. Stifel Nicolaus sees a rise to 1,550, up 6 percent from Wednesday.
"Three events will likely constrain the S&P 500 from advancing beyond its 3-percent year-to-date rise until the end of the first quarter,” Goldman Sachs analysts say in a commentary obtained by CNBC.
Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown
Those are “the debt ceiling, resolution of the 'sequester' and fourth-quarter earnings season.”
“However, a strengthening U.S. economy, rising earnings and modest starting valuation should lift the index … by the end of 2013.”
As for Stifel Nicolaus, it expects “a bumpy ride” for stocks in the first half of the year, with the economy “dead in the water,” Chad Morganlander, a portfolio manager at the firm, tells CNBC.
But he expects gross domestic product growth of 2 percent for the year as a whole, lifting stocks higher. The economy expanded 3.1 percent in the third quarter.
The market’s near-term direction could be determined by fourth-quarter earnings, experts say.
“Earnings growth is going to be a little bit harder to come by,” Peter Jankovskis, co-chief investment officer at Oakbrook Investments, tells Bloomberg. “If we see some good results from bellwether companies, that will definitely give a lift to the market.”
Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown
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