S&P to Hit 1250, Stay Strong Into 2011: Chief Investor

Stocks opened lower on Wednesday on some disappointing earnings and the dollar's gains. Which direction are stocks headed now? Todd Salamone, senior vice-president of research at Schaeffer’s Investment Research, and Dan Genter, president, chief executive and chief investment officer of RNC Genter Capital Management, shared their outlooks.

CNBC Market Edge
CNBC Market Edge   

“For 2010, we’re bullish,” Salamone told CNBC.

He said that when the market rallies from the bottom to a top, investors go through four stages of sentiment: Despair, disbelief, acceptance and euphoria.

“We think we’re at the disbelief stage,” he said. “That’s an indication that sideline money can come in and boost this market. In the short term, we do see some concern around the 1,150 area, which we think is some major technical resistance and we’re going to have some speed bumps along the way in 2010.”

In the meantime, Genter said he expects to see a slow topline growth in 2010, of about 7 percent.

“But as far as that stratospheric type of increase, that’s behind us—so the market’s going to have to digest that. Fortunately, P/Es are quite reasonable,” he said.

“We’re probably going to see about 1,250 on the S&P, which with dividends we have about an 11 percent upside, and so we have a pretty good year ahead of us and it’s going to carry into 2011.”

Genter said the technology sector had a great run, but there’s still more fuel for it to rise. He said the consumer and the health care area will also see good earnings growth.

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No immediate information was available for Genter or Salamone.