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'Bullish History' Suggests S&P at 1500 Soon: Analyst
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CNBC.com Writer
Stocks were sharply higher Friday after the government reported August non-farm payrolls fell much less than expected. Will the markets continue to rally in September? Peter Costa, president of Empire Executions and CNBC market analyst, and Wayne Kaufman, chief market analyst at John Thomas Financial, discussed their market outlooks.
“I’m still bearish overall, but September is going to have an upward bias. A lot of money is going to have to come back into the market [and] this month is going to be a positive month,” Costa told CNBC.
In the meantime, Kaufman said he is bullish on the markets going forward.
“We’ve just had two major sentiment surveys—newsletter writers and individual investors—both of these were levels seen in March 2009,” he explained.
“On top of that, earnings versus bond yields—those are also at levels of March/April 2009, and until I see aggregate earnings for 2011 start to come down, valuations are very nice.”
'A Bullish History'
In addition, Kaufman noted that the market traditionally rallies after the second-year presidential cycle going into the third.
“Historically, you have on average in the last seven cycles, a 50 percent increase from the second-year bottom, which, if the bottom was July 1 at 1,010 [on the S&P 500], that average will take you up to 1,500. It’s very hard to argue with that type of a bullish history.”
Second Opinion:
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Scorecard—What They Said:
- Costa's Previous Appearance on CNBC (Sept. 2, 2010)
- Kaufman's Previous Appearance on CNBC (Aug. 13, 2010)
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More Market/Econ Views:
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- Why Jobs Data Is the EKG of Capitalism
- High-Quality Names Are Looking Cheap: Stock Picker
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CNBC Slideshows:
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CNBC Data Pages:
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Friday's Dow Gainers (as of this writing):
Bank of America [BAC
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Home Depot [HD
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Cisco Systems [CSCO
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JPMorgan Chase [JPM
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General Electric* [GE
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Disclosures:
No immediate information was available for Costa or Kaufman.
*GE is the parent company of CNBC and CNBC.com.
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Data is a real-time snapshot *Data is delayed at least 15 minutes
