Byron Wien: Why I’ve become bullish on the market
Byron Wien is changing his tune. In January, he predicted that 2013 would be a tough year for stocks—but now he says that the market has further to run.
"If the economy keeps on growing at a 2 percent or better rate, if earnings do improve, maybe even being disappointing but still improving, and if valuations aren't excessive—and they're not—stocks can go higher next year," Wien, the vice chairman of Blackstone Advisory Partners, said on Thursday's "Futures Now."
This is in stark contrast to his call for what the market would do this year. In his famed series of yearly predictions, Wien said that 2013 would be a tough year for the market.
"A profit margin squeeze and limited revenue growth cause 2013 earnings for the Standard & Poor's 500 to decline before $100, disappointing investors," Wien predicted in early January. "The S&P 500 trades below 1,300."
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Wien says that he got part of that call mostly right.
"While the S&P is going to earn probably $105, earnings were disappointing this year," Wien maintained. "They didn't expand as much as people thought, even though the economy bumbled along."
So, now that the S&P is about 500 points above his 2013 prediction, what was he missing?
"Market valuation was not out of line, and while the economy was growing, the Federal Reserve was still keeping its stimulus program going," Wien said. "I think a large part of the appreciation in the market this year is a result of Federal Reserve monetary accommodation. That's what drove the market. It drove stock prices higher, and it kept interest rates low."
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Now, with the market up 25 percent year-to-date, he predicts more bright skies ahead.
"The market is not overvalued, and can work its way higher," Wien said.