Morgan Stanley’s Parker Turns Bullish on Stocks

Thursday, 21 Mar 2013 07:53 AM

By Dan Weil

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Adam Parker, Morgan Stanley’s chief U.S. equity strategist, has adopted a positive view of stocks for the first time since he started his job in 2010.

He now predicts the Standard & Poor’s 500 Index will end the year at 1,600, The Wall Street Journal reports. That would entail a 3.4 percent gain from Tuesday’s close of 1,548 and a 12 percent increase for the year as a whole.

In November, Parker predicted the S&P 500 would end 2013 at 1,434, which would represent a 0.5 percent gain for the year.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.

The U.S. economic picture has turned him bullish.

"Given our economics team's view of improving U.S. growth and ample liquidity still being provided by the Fed, it is hard to see what causes a major market correction," Parker writes in a commentary obtained by The Journal.

But he injected notes of caution in an interview with the paper.

"We've been saying for some time that the market's ahead of itself by any historical measure," Parker said. He also said investors and analysts are overly positive in their expectations for corporate earnings.

Another former bear who has switched camps is banking analyst Meredith Whitney. "Without a doubt, I have not been this constructive, this bullish on the U.S., on equities in my career," she told CNBC Monday.

One firm that has generally been bullish over the past few years is BlackRock. And it’s positive now too.

"In the short term, some kind of pullback would be perfectly natural and normal to see," the firm’s Chief Investment Officer Chris Leavy tells CNBC. "Longer term, though, we still think equities have further to go."

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.

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