US Stocks Could Rise Further; Double-Dip Less Likely: Cohen
Stock prices still have room to rise further, and recent economic reports show there is less chance of a double-dip recession in the US, well-known market guru Abby Joseph Cohen told CNBC Tuesday.
"The stock market is almost always a discounting mechanism that almost always moves in advance of the economy, but we don't think it has moved too far at this point," Cohen said in a live interview.
The chief market strategist for Goldman Sachs has placed a price target for the S&P 500 of 1250 and 1300 for year's end — unchanged from what she predicted in December. The S&P is currently around 1140.
Though she admitted many investors missed the "dramatic" opportunities in place a year ago, Cohen said lower volatility and lesser correlations between assets and within markets has led to a gradual return to the markets.
Specifically, she's seen more risk-taking among investors investors, who have started moving money from mutual funds into equities, and purchasing corporate bonds instead of Treasurys.
"Clearly investor psyche was very hard hit during the credit crisis and the recession," she said.
There is also less likelihood of a double-dip recession, Cohen said.
She cited the fact that companies are increasing their dividends, employment figures are less bad, and there's increased demand for things such as new orders.