Neuberger Berman: All Aboard for the S&P 500 to Hit 2,000 by Spring

Monday, 25 Nov 2013 10:46 AM

By John Morgan

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Investors should get ready for another millennial notch in the stock market, according to an exuberant team of portfolio managers at asset management firm Neuberger Berman.

They are predicting the S&P 500 will cross the historic mark of 2,000 mark by springtime.

The team also expects tapering of massive asset purchases by the Federal Reserve, which has been a major prop under financial markets, may not begin until March.

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Eli Salzmann, portfolio manager for U.S. large cap value strategies, is counting on “mini-hyper growth” as 2014 begins, InvestmentNews reported.

“I think the first half of next year will surprise everyone on the upside,” Salzmann predicted. “We're not in the beginning of the game. We're in the sixth or seventh inning, but we're going to go higher.”

Even the bond market is going to head higher, according to Andy Johnson, head of Neuberger Berman of investment grade fixed income. He forecast bond returns in 2014 could rise into the 1 percent to 3 percent range, Investment News reported.

Unlike some economists, Salzmann does not believe that the advent of Fed tapering will prompt a market sell-off. He said the long-awaited monthly reduction of huge bond purchases by the central bank will actually be good for the economy.

“From an equity standpoint, a mild taper would be really, really good news,” he predicted.

USA Today reported the bull market in stocks is “riding the powerful combination of a slow-but-steady economy, solid corporate profits and record low interest rates, thanks to the Federal Reserve.”

The Dow Jones Industrial Average finished above its own historic millennial mark in Thursday trading, closing over 16,000 for the first time at 16,010. Friday, the Standard & Poor's 500 index closed above 1,800 for the first time, capping seven straight weeks of gains.

Ken Winans of Winans Investments told USA Today, “When people talk about the Dow, they don't talk about Dow 15,995. They care about Dow 16,000," he said. "Those that missed this rally will call their brokerage and jump in."

But are the big even-number hurdles like S&P 2000 and Dow 16,000 really that important for the major stock indexes?

"People may discount milestones, but they are psychologically significant," said Todd Salamone of Schaeffer's Investment Research.

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