The sentiment debate continues: The WSJ (free) looked over the full BW list of strategists, and determined that the "consensus outlook for the U.S. stock market in
2007 reads like a Southern California weather report: sunny and mild,
with barely a chance of clouds."
Even the perspective of modest growth seems to be getting misinterpeted: Coming off of a year that saw 2H essentially going straight up, an 8% forecast for 2007 is not what i call excessively bearish. (See our prior discussions Sentiment? Depends on who you ask and Signs of a Market Bottom?).
Here’s the overview:
"In a recent Russell Investment Group survey of 87
money managers, 86% said they expected stocks to rise in 2007, and just
12% said they expected the market to fall. Nearly a third expects
stocks to rise 10% or more, while only 1% expects a 10% decline.
"Underpinning managers’ confidence is a growing conviction the Federal
Reserve Board has achieved a soft landing for the U.S. economy," wrote
Russell chief portfolio strategist Randy Lert.
In a much smaller survey of a dozen strategists this
week, The Wall Street Journal Online heard that same belief repeated
over and over again. So powerful is the sentiment that many of last
year’s pessimists have capitulated, including Richard Bernstein,
Merrill Lynch’s famously bearish strategist, who recently forecast an
11% gain in the S&P 500 next year.
But Mr. Bernstein and a few other strategists –
including Goldman Sachs’ Abby Joseph Cohen, who describes the market
environment as "reasonably pleasant" — warn that volatility may return
to the market next year after a long, blissful period of complacency.
That could set the stage for a less-pleasant 2008. (emphasis)
In descending order from the most-bullish to the
least-bullish (and you’ll notice there’s not much difference between
the two, unlike last year’s survey),
I am the bottom of the barrel.
Check out the full list — and tell me if you think it is a bearish group view . . .
The Outlook for 2007: ‘Reasonably Pleasant’
Strategists See Modest Stock Gains
And Soft Landing for the Economy
December 22, 2006