At these levels, equities have nowhere to go but up in 2012, says Alec Young, S&P global equity strategist.
"We're looking for 1400 on the S&P 500. It would be higher were it not for continued tail risk from Europe, but we're fairly upbeat on next year," says Young.
Considering the S&P 500 index on Friday is hovering around $1219, consistent bullish factors will need to kick in next year to prove Young right.
Young's views run contrary to that of Bank of America, which predicted in a report released Thursday that the market will go into deceleration by the end of 2012, due to fiscal tightening and "considerable uncertainty around policy after the election."
Young says these drags on the economy are already priced into the market, and that even 2 percent GDP growth will be enough to see growth in equities.
"As an expansion slows, its normal for earnings growth to slow. The street's predicting about 8 percent on earnings. The key is, will we get that growth? I think we will," he said.
Young's comments come on a slightly positive day for stocks, but with low volume and just 42 percent of S&P 500 companies trading above their 50-day moving averages. While this generated skepticism on Wall Street, Young did not backpedal.
"The US market wants to go higher, and when Europe isn't in our face, we don't seem to have any problem doing that," added Young.
As for positioning in 2012, Youngs says stick with US, large-cap, dividend paying stocks, "just because of the lack of the attractiveness in the alternatives, in Treasurys and cash."
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As per Standard & Poors policy, Alec Young does not own individual stocks in the S&P 500 index.