Birinyi Associates points out today that Wall Street's strategists are even more bullish this month than they were at the start of the year.
In fact, they are forecasting a 16 percent gain in the S&P 500 between now and the end of the year, compared to a 12 percent gain at the start of the year.
Jeff Rubin of Birinyi makes this point in a note today, and he also says that "strategists have been less than prescient these past ten years." Their August forecasts have only been rosier twice in that period, he says, and both of those times they were way wrong.
In 2001, the August forecast was for a 19 percent gain, and it was instead an 18 percent decline. The next year they were wrong again. They forecast a 17 percent gain, and the market landed a 21 percent decline.
Because of the market's decline, the average targets are now 184 points below where they started the year. Their average target has gone from 1642 at year end to a current forecast of 1458. (The S&P 500 right now is battling to hold a level of 1285.)
I called Rubin to find out more about his report. He compiled the forecasts of strategists at 11 sell side firms, including the Wall Street majors. "One other interesting thing is they always are bulilsh. I feel like in every Augsut in the last 10 years, it's always green," he said. "Their job is to sell stocks."
I looked at a chart Rubin included in his note for the years they got it right. 2003 was one. They forecast an increase of just over 5 percent and got it. But since then the forecasts and actual results have not lined up.
CNBC.com readers, in my view, are pretty prescient in their own view of the market. We would love to hear what you think.
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