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On the heels of too many people saying the economy is all fixed now, a senior investment strategist at Goldman says the same.
Who cares about the other bubbles in waiting, the trillions of new dollars printed, or the fact that the effective jobless rate is still hovering around 19%. IT'S ALL FIXED!
http://www.bloomberg.com/apps/news?pid=20601109&sid=a0sLU2hOmYZ0Aug. 17 (Bloomberg) -- The U.S. recession is ending “right now,” said Abby Joseph Cohen, a senior investment strategist at Goldman Sachs Group Inc.
The economy may grow by 3 percent in the next couple of quarters and expand by 1.5 percent to 2 percent next year, Cohen said. While consumer spending is likely to rise, it probably won’t increase as fast as at the end of prior periods when the U.S. was emerging from a recession, she said.
“Clearly the economy is on the mend,” Cohen said in an interview with Bloomberg Radio. “We do think that profit growth will be more substantial going forward.”
Cohen, known for her optimistic forecasts for stocks during the 1990s stock-market rally, was replaced in March 2008 as the bank’s chief forecaster for the U.S. equity market. She predicted in a May 1 interview that the Standard & Poor’s 500 Index might jump 20 percent to 1,050 in the next 6 to 12 months. The index climbed 15 percent to 1,010.48 through Aug. 7 before retreating 0.6 percent last week.
The S&P 500 has rallied 48 percent from a 12-year low on March 9 as 76 percent of companies in the benchmark reported better-than-estimated second quarter results and economic reports showed improvement. Equities fell last week for the first time in five weeks as a drop in consumer confidence fueled concern the steepest rally since the 1930s isn’t justified by economic prospects.
So-called fair value for the S&P 500 is between 1,050 and 1,100, Cohen said. David Kostin, who replaced Cohen as Goldman Sachs’s chief U.S. market forecaster, estimates the index will end the year at 1,060 and earn $52 a share for 2009.
“The bottom line looks pretty good,” she said. “The companies that are still in business are showing that they have pretty good margins.”
Who cares about the other bubbles in waiting, the trillions of new dollars printed, or the fact that the effective jobless rate is still hovering around 19%. IT'S ALL FIXED!