S&P/ASX 200 to end the year at 6000?
by Peter Switzer
We needed a Wall Street relief rally and it turned up on cue but now we have to see some consolidation so a base is built to unwind the correction. As I have said before, we have to see the positives of the US recovery out-punch the negatives coming out of Europe.
But wait, there’s more with Deutsche Bank’s chief equity strategist, Tony Brennan, still not running away from his early-year forecast of the S&P/ASX 200 ending the year at 6000!
On my program, SWITZER on Sky News Business Channel last night I expected him to pull his forecast down to say 5200 but what he argued was that we’re in the eye of the European storm right now and he says there could be better news ahead.
He says the European leaders have to show they are in control of their members’ fiscal policies and then the lower euro should help the economies stage a recovery, albeit a weaker one than many expected.
US recovery story
After that the US economic recovery, which he thinks is real, could kick in and inspire investors to get buying stocks, many of which are at a great values for long-term investors.
The Dow Jones went up 123.49, or 1.3 per cent, to finish at 9939.98, after a see-saw session and the S&P 500 put on a bit over one per cent.
Contrasting the weak efforts of his European counterparts, the US central bank boss Ben Bernanke came out and said the Yanks would avoid a double-dip recession. He knows it wont be easy but he likes the run of economic data.
Good news needed
Now if Kevin Rudd and team can give us some good resource tax news then our market could kick in with some more good gains. And of course, if our Reserve Bank can gives us a real interest rate break, then both the market and the economy should recover by year’s end.
I reckon Tony, one my prize economic students when I taught at the UNSW many years ago, could be a little too optimistic but I love his guts and his predictions. Go Tony!
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Published on: Wednesday, June 09, 2010blog comments powered by Disqus