Experts See Continued Gains Ahead for Stocks

Thursday, 27 Dec 2012 09:00 AM

By Dan Weil

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The bull run for stocks is almost four years old now, and many market strategists say it will continue for at least another 12 months.

"What we've done for four years is climb the wall of worry," Jim Paulsen, chief market strategist at Wells Capital Management, told CNBC.

"Next year is going to be more of a confidence-driven run, not just climbing despite concerns, but really climbing because of rising confidence."

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

The Standard & Poor’s 500 Index will surpass its 2007 record high of 1,565, and then the move will really gain momentum, Paulsen said. That level represents a 10 percent rise from Wednesday’s close of 1,420.

Savita Subramanian, a strategist at Bank of America Merrill Lynch, sees the S&P 500 hitting 1,600 next year. "[T]oday's depressed valuations and bearish sentiment are laying the groundwork for the next secular bull market in equities," she wrote in a commentary obtained by CNBC.

While Paulsen and Subramanian see bonds languishing and stocks flourishing, independent economist Gary Shilling expects the opposite.

With the economy likely to be in recession, “you probably look for more appreciation in long-term Treasury bonds, which have been a favorite of mine since 1981," he told Yahoo.

Shilling anticipates the 10-year Treasury yield will fall to 1 percent next year from 1.76 percent late Wednesday. Subramanian expects a 2 percent yield in 2013.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

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