Wall Street took a breather Tuesday, after a strong first trading day of 2010. How should investors be positioned? Rod Smyth, chief investment strategist at Riverfront Investment Group, and Fritz Meyer, senior market strategist at Invesco AIM, shared their market outlooks.
“I’m optimistic on both the economy and the stock markets,” Meyer told CNBC. “The bigger context on the economy is that we’re only a couple quarters into a recovery that will span a number of years.”
Meyer said the S&P 500 will reach 1,600 in several years.
“I think 1,300 to 1,350 by the end of this year is not unreasonable,” he said.
“We’re going to see continued above average-economic growth for several quarters…all the economic indicators recently point to 4 to 4.5 percent GDP growth over the next several couple of quarters and I think it will taper off as next year unfolds.”
In the meantime, Smyth said the challenge of 2010 is how the Federal Reserve and the U.S. government choose to unwind the stimulus.
“They’re going to continue to err on the side of withdrawing slowly, because they are more afraid of a double dip than a little bit of an inflation,” he said.
“And that keeps you in the reflation trade, keeps you in stocks, and keeps the 1250 to 1300 target [on the S&P].”
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No immediate information was available for Meyer or Smyth.