Tags: BofA | stocks | gold | highs

BofA: Stocks, Gold Headed to Record Highs Next Year

Wednesday, 12 Dec 2012 09:12 AM

By Dan Weil

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Stocks and gold will hit all-time peaks in 2013, as the economy recovers from the fiscal cliff and investors shift to stocks from bonds, according to Bank of America Merrill Lynch analysts.

They predicted at a media conference Tuesday that the Standard & Poor's 500 Index will reach 1,600, up 12 percent from Tuesday’s close, CNBC reports.

And they say gold could touch $2,000, or even $2,400 an ounce, the latter up 41 percent from late Tuesday.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

BofA economist Ethan Harris anticipates we will jump off the fiscal cliff for up to three months. But eventually $300 billion of tax increases will be imposed.

"Once the fiscal cliff is resolved, business confidence and spending should come back. We are also optimistic about housing," he says.

BofA sees a "Great Rotation" to equities from fixed income. Bonds are due for a spill, its analysts say.

"Historically, when we see a major inflection point in the bond market, you see the equity market break out of a long-term trading range," says Michael Hartnett, BofA’s chief investment strategist.

Abby Joseph Cohen, the renowned investment strategist at Goldman Sachs, also is bullish on stocks. She predicts they will rise 10 to 15 percent next year.

"We are slowly growing our way out of the most extreme version of the debt crisis," she said at a recent investment conference, according to CNNMoney.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

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