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S&P May 'Overshoot' to 1,200: Chief Investor

Published: Tuesday, 25 Aug 2009 | 11:49 AM ET

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By: JeeYeon Park
CNBC News Associate

Stocks rose Tuesday after encouraging reports on home prices and consumer confidence. Additionally, Pres. Obama officially reappointed Ben Bernanke for another term as Federal Reserve chairman.

Steve Auth, CIO of Global Equities at Federated Investors, and David Goerz, CIO of Highmark Capital, discussed their market outlooks and how investors should be shaping their portfolios.

“Bernanke’s reappointment is good news,” Goerz told CNBC.

“It is important that the U.S. Federal Reserve appeared to be independent and is independent and I think this takes the issue off the table. The Fed can look forward to a more critical issue, which will be their exit strategy.”

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Goerz said it is also important to see an increase in housing starts.

“Having the housing market bottom is very key to getting people back to work—a very important part of what we’ve seen in employment losses is residential construction,” he said.

“So as we see the turn in housing, we would expect housing starts to start to pick up and that will help to bolster the economy. We are looking to about 2.5 percent growth next year for GDP and about 3 percent in 2011.”

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Auth said the economy is in the middle of a "V-shaped" recovery.

“We’ve been looking at housing, jobs and GDP numbers,” he said. “The housing numbers confirm that the housing market is bottoming.”

Auth said the markets could "overshoot" and hit 1,200 on the S&P 500 in the next 3 to 4 months. However he said “it will be much trickier” from that point.

Counterpoints:

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Disclosures:

No immediate information was available for Auth or Goerz.

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