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Bannister: How We Get to S&P 1,600 in 2013

Tuesday, 4 Dec 2012 | 1:45 PM ET
Bannister: How We Get to S&P 1,600 in 2013
Although the market still needs some fiscal clarity, Barry Bannister of Stifel Nicolaus expects the S&P to hit 1,600 by early 2013.

Although the market still needs fiscal clarity, the S&P 500 will likely hit 1,600 in early 2013, Stifel Nicolaus Chief Macro and Portfolio Strategist Barry Bannister said Tuesday on CNBC.

On "Fast Money," Bannister shared reasons why stocks are headed higher:

  • Market is in the late stage of a secular bull run
  • "Fiscal cliff" is a red herring
  • ECB forcing fiscal process
  • China stabilizing short-term

"Right now the central banks have been in the lead around the world, and we need the politicians to fall in line," he said. "It's taking a little longer than I thought, though."

Bannister, who had originally set a year-end target of 1,600, revealed which sectors he believed would drive equities higher.

"Keep in mind that the largest earning shares of the S&P are in financials, energy, materials, industrials, and those sectors would get the P/E re-rating on growth confidence," he said. "One of the things the bears aren't pointing out is that since the S&P downgrade of U.S. debt, the S&P is up 200 points and earnings estimates for this year and '13 are down by $200.

"So you've had a P/E re-rating, and the value side of the market led by financials should be the strongest part."

Sectors to avoid, according to Bannister: Utilites, health care, consumer staples and telecom.

Trader disclosure: On Dec. 4, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long VRTS; Joe Terranova is long TJX; Joe Terranova is long AAPL; Joe Terranova is long YUM; Joe Terranova is long SWN; Joe Terranova is long GLW; Joe Terranova is long DELL; Joe Terranova is long VZ; Joe Terranova is long XOM; Jon Najarian is long call spreads in FB; Jon Najarian is long call spreads in P; Jon Najarian is long call spreads in JNPR; Jon Najarian is long call spreads in NFLX; Jon Najarian is long call spreads in WLT; Jon Najarian is long call spreads in CLF; Jon Najarian is long call spreads in LEN; Jon Najarian is long call spreads in PHM; Jon Najarian is long call spreads in TOL; Jon Najarian is short puts in GLD; Jon Najarian is short puts in AGQ; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long STSI; Jon Najarian is long GLUU; Steve Weiss is long BAC; Steve Weiss is long SODA; Mike Murphy is long AAPL; Mike Murphy is long BAC; Mike Murphy is long TGT; Mike Murphy is long TOL.

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