Improved economic performance, a solution to the fiscal cliff and the Federal Reserve’s easing program should push stock prices higher for the rest of the year, says hedge fund manager Doug Kass.
Assuming President Barack Obama is re-elected and that Democrats maintain control of the Senate, “I see the downside to the S&P 500 over the remainder of the year limited to about 1,390-1,400, and the upside to the S&P 500 should be 1,450-1,470,” Kass writes on Real Money.
The Standard & Poor’s 500 Index closed at 1,417 Monday.
Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation
As for the economy, “while I am still in the camp that expects sub-par global growth, recent indications are that a self-sustaining economic recovery is in place and that the recessionistas are dead wrong,” he writes.
In terms of the fiscal cliff, both Obama and Republican Mitt Romney would have the opportunity to reach a bipartisan accord if elected, and Kass thinks that will happen.
“Both parties acknowledge the need for tax reform and agree that we have to figure out a way to keep the spending on Social Security, Medicare and Medicaid in check.”
Some analysts say a victory by Romney would be better for stocks, as he would seek to curb regulations and cut taxes.
“Recent surveys suggest institutional investors believe that an Obama win would favor bonds, a Romney win, stocks,” Peter Buchanan, senior economist at CIBC World Markets, wrote in a commentary obtained by MarketWatch.
Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation
© 2013 Moneynews. All rights reserved.