Photo: Beth Beck
What is this global market crash you speak of?BofA’s top strategist, David Bianco, is having none of it.
He just hiked his 12-month forecast on the S&P 500 from 1400 to 1450 (it closed Friday at 1154).
Why the bullishness?
He expects 2012 EPS to grow to $104, and he’s sticking to some points he’s been making a long time.
- Record high EPS and record low interest rates are bullish. The S&P 500 remains ~25% below its 2007 high.
- 2011E S&P EPS of $97 represents new peak EPS for the S&P 500. 2012E S&P EPS is $104, which is 7% growth.
- Healthy commodity and capital goods demand/prices to keep EPS growth healthy, weak GDP to keep interest rates low.
- The S&P PE is under 12x, putting the EPS yield at about 8.5%. The offered equity risk premium is a record 800+ bp.
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