The outlook for 2010 is so consistent, it’s like there’s no reason to even play it out.
Everyone and their mother seems to think that the first half will be good and the second half will go sour, as markets react to (take your pick of) sovereign debt risks, rising rates, and sluggish GDP growth.
RBC just came out with such a call.
Goldman is saying the same thing.
In its weekly strategy call for clients, the firm sees a first-half rally then a second-half selloff.
We anticipate a rally to 1300 in 1H; and a fade to 1250 by year-end. During
the first half of 2010, we anticipate S&P 500 may rise towards 1300, a level
last experienced during summer 2008. Sustained low interest rates will
benefit risk assets. Cyclical sectors such as Information Technology, Energy
and Materials should outperform. Strong growth in the BRICs will persist as
the major macroeconomic theme <GSTHBRIC>. Firms with high operating
leverage should also perform strongly <GSTHOPHI>. Investor risk is to be
underweight beta. We feature a basket of the highest Sharpe ratio trades for
the next six months <GSTHSHRP>. Risk to our view is Fed tightens sooner
than we expect.
The following charts give some idea of what the bank is calling for:
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