For traders, Christmas came early this year. A strong U.S. jobs report Friday and a rebound in the U.S. dollar have kicked up a bit of a "Santa Claus rally" in the markets. And at least one analyst says there are more gifts under the tree. Phil Dow, director of equity strategy at RBC Dain Rauscher, wouldn’t be surprised if we saw an additional percent or two before the year is through.
Dow predicts earnings growth going into 2007 will be “pretty powerful,” while the U.S. economic pace slows. As for next year, these strong earnings and a good long-term forecast for the economy could preclude what some see as a necessary Fed rate cut to jump-start the market. Dow sees an overall 8% to 10% gain for next year.