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Bull Run for Stocks in 2013: Citigroup's Levkovich

So long as Washington doesn't flub a solution to the nation's fiscal problems, the S&P 500 should log a 13 percent gain in 2013, Citigroup's chief U.S. equity strategist, Tobias Levkovich, told CNBC's "Squawk on the Street" on Monday.

"If all we're doing is going past December 31 and have to do something in the first couple of weeks in January, I don't think it rips apart the opportunity for next year," said the strategist on the timing for a potential deal to avert the "fiscal cliff" of automatic tax hikes and spending cuts.

But Levkovich warned if politicians can't reach a consensus to respond to the fiscal cliff, "it's a huge risk to the market."

The Citigroup strategist has a target of 1615 on the S&P 500 for the end of next year. Levkovich expects the U.S. stock market to enter into a new secular bull market, with the S&P reaching new highs.

(Read More: Boldest Predictions 2013)

He said a rebound in housing, the energy boom, mobility in technology and the manufacturing renaissance will all help propel the stock market higher.

But with the strategist predicting only 5 percent earnings growth next year, the valuation multiple for the S&P will have to rise to reach his year-end target.

"You're going to need some activity in Washington to address the bigger issues, the fiscal reform issues, not just getting past the fiscal cliff" for stock multiples to expand, Levkovich said.

Looking ahead to 2014

Video

  • CNBC's Sharon Epperson shares her outlook on oil, gold, copper and corn next year, and Dan Dicker, MercBloc president, provides his energy forecast for 2013 and the best way to play oil and gas.

  • Defense companies are sure to be affected if we go over the "fiscal cliff" because of automatic spending cuts to the industry, reports CNBC's Jane Wells.

  • CNBC's Simon Hobbs takes a look at some of the major travel trends in 2013.

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