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Post-Fed Predictions: A 14,000 Dow?

The Federal Reserve left its benchmark interest rate unchanged at 5.25%--but left the door open for increases--if inflation persists. CNBC's Erin Burnett had two investment strategists, Bob Doll and Charles Reinhard, on “Street Signs” today. Both men gave their post-Fed meeting predictions for 2007.

Reinhard’s the director of portfolio strategy at Lehman Brothers Asset Management. He’s predicting a 14,000 Dow and 1,600 S&P for next year – as long as the Fed holds on rate changes or makes a cut.

Doll, the vice chairman and global chief investment officer at Blackrock, is less enthusiastic about 2007. A slowing economy and smaller earnings growth will keep the Dow closer to 13,300.

Both analysts agreed that energy is worth buying into. The stocks are cheap, and the supply-demand problem isn’t solved yet. Cold weather is sure to boost shares prices as well.

Doll also thinks health care is a strong pick for 2007. The November U.S. elections threw a bit of cold water on these stocks, but they have the ability to grow despite a slowing economy. Dolls says there’s a chance this sector could see double-digit growth next year.

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  • Co-anchor of CNBC's "Street Signs," Amanda Drury is based at the network's global headquarters in Englewood Cliffs, N.J.