Raymond James strategist Jeff Saut is in full-on bull mode, painting a rosy scenario for both stocks and the broader economy
The call for this week: One year ago we stated that the bottoming process that began in October 2008 was complete and we were “all in.” We won’t have that same opportunity this year for we’re at the Raymond James 31st Annual Institutional Investors Conference with more than 300 presenting companies and some 700 portfolio managers. Consequently, these will likely be the only strategy comments for the week. Nevertheless, it still appears that the new year’s “selling stampede” ended with the “hammer lows” recorded on February 4th and 5th, and, we tilted accounts accordingly. Meanwhile, March, April, and May are seasonally the strongest months of the year for the S&P 500 (SPX/1138.70). Combine that with the fact that the breadth figures have been stronger than the SPX’s actual price rise, and that positive 4Q09 earnings and revenue surprises have exceeded 70%, and we see no reason to alter our 1200 – 1250 intermediate-term price target.
That said, the SPX has expended a lot of energy, rallying rally back to the 1140 – 1150 overhead resistance zone, so it would not surprise us to see the markets stall for a while before trending higher. As for the recent spate of softening economic reports, it feels like consumers are merely reacting to a winter that is now legend. Our sense is the stormy February data will abate with Spring. Evidently Warren Buffet thinks so as well given his recent statement, “We got past Pearl Harbor (and) we will win the war. It’s going slightly our way.”