Somebody Is Wrong About 2013

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Man, somebody is very wrong about 2013.

There is a substantial group that has been bearish on 2013, arguing that all this optimism on the fiscal cliff resolution is misplaced. That the fiscal cliff represents the start of American Austerity. That higher taxes and lower spending is a headwind for stocks in 2013.

This group is buying into the "fiscal cliff," and arguing for profit-taking immediately after.

But most remain moderately bullish. Latest to weigh in from the bull camp is JPMorgan Chase: Thomas Lee said this morning: "Our base case (and framework) remains that we are in a secular bull market, which started in March 2009 and will continue beyond 2013."

He is establishing a 2013 year-end target of 1,580 for the S&P 500 (up 13 percent), which would be just enough to beat the historic high of 1,576 going back to October, 2007. Much of this is based on clearing of policy uncertainty in Washington and Europe.

That may be optimistic. I'm doubtful that any deal on the fiscal cliff will be broad enough to resolve many of the issues on entitlements, or even the debt ceiling. I also don't think it will reduce the U.S. Federal Reserve's willingness to ease.

Speaking of the Fed: Chairman Ben Bernanke's press conference is at 2:30 p.m. ET, but the economic forecast at 2 p.m.

Elsewhere, slower growth projections from two global companies:

1) Dupont: slower growth. That's the takeaway from Dupont's conference call last night. Dupont sees 2 percent global growth next year, only 1.5 percent growth in North America, 4 percent growth in Asia Pacific (decent growth of 7 to 8 percent in China).

This projection is important, because Dupont operates across many industries, including chemicals, housing (Tyvek insulation, Corian tops), electronics, and agriculture.

2) Joy Global: slower growth. Mining equipment manufacturing company Joy Global falls fractionally in pre-market trading after beating on the top and bottom line, but provided a 2013 outlook below what the Street expects due to lower anticipated volumes.

They are talking about an 8 percent to 13 percent decline in revenues for 2013.

Joy reported fourth-quarter earnings per share (EPS) of $0.95, two cents above analysts' estimates. The company, which supplies coal mining equipment, said it faced slowing demand for its products this year partially due to weakening demand in China.

"We are setting our plans for 2013 on the basis that current market conditions continue," said CEO Mike Sutherlin. "Although there is upside potential in our markets, the timing is uncertain and unlikely to occur until current excess mine capacity is reduced." Joy sees 2013 EPS of between $5.90 and $6.50, lower than the Street's $6.73 a share view.

Still, the JOY CEO did say overall growth in China is promising: "There are signs of improvement in China."

Bottom line: Two global companies have set the bar a bit lower for 2013. Both are trying to lower costs to match market conditions.

3) A fixed 30-year mortgage? The average rate is 3.47 percent, according to the MBA — the lowest in its survey history. Applications to purchase a home were up just 0.7 percent from the prior week.

4) Bullishness high: Investors Intelligence reports bears drop to lowest level since May 16, bulls at a nine-week high.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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