This will be another year of buoyant earnings, sending the Standard & Poor’s 500 Index up to 1,600 by year-end, according to Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America.
That would represent a 7 percent gain from Monday’s close of 1,495.71, and a 12 percent increase for the year.
"The big surprise for the U.S. equity market is that we might not see a pullback this year, despite what many in the markets are expecting," Subramanian tells CNBC, noting that the market can avoid its typical 5 percent correction.
Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.
Of the 264 S&P 500 companies that had reported earnings as of Monday’s close, about 73 percent beat analysts’ profit forecasts, and 66 percent beat analyst’s sales projections, according to Bloomberg data.
"Until we see a real degradation in earnings, that would cause concern, but they have been consistently growing," Subramanian explains. "This is a sign that what we're seeing is real."
Jim Paulsen, chief investment strategist at Wells Capital Management, is even more bullish than the BofA analyst. He thinks the S&P 500 can climb as high as 1,700 this year.
The economy should beat the consensus forecast for 2 percent growth in 2013, Paulsen tells Yahoo. Also, “confidence continues to rise. There’s a sense that more things are working — housing, falling unemployment, lending.”
Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.
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