Bloomberg News

Birinyi Sees S&P at 2,100, Curnutt Says Gains Depend on Fed

June 14, 2011

(Updates with S&P 500’s gain implied by Birinyi’s forecast in third paragraph.)

June 14 (Bloomberg) -- Birinyi Associates Inc.’s Jeffrey Yale Rubin said the firm remains bullish on equities this year, while Dean Curnutt of Macro Risk Advisors says the performance of stocks depends on the actions by the Federal Reserve.

“For the remainder of the year, we’re positive,” Rubin said today at a panel discussion on equities at the Bloomberg Money Managers conference in Boston. For the Standard & Poor’s 500 Index, “we have a target of 2,100 but that’s not this year, that’s not next year. When we look at stock markets that go on for a long period of time, that start off quickly -- 1974, 1982, 2009 -- those markets are not ones that end quickly. If you also look at those markets during this period, phase two of the market, it runs into difficulty.”

The forecast represents a 65 percent gain from the S&P 500’s closing level of 1,271.83 yesterday, and a 34 percent advance from the gauge’s record high of 1,565.15 reached in October 2007.

The S&P 500 and Dow Jones Industrial Average have fallen six straight weeks, the longest streaks since 2008 and 2002, respectively, as reports on jobs and manufacturing spurred concern that the global economy is slowing. The S&P 500 is still up 90 percent since its low in March 2009. Equities have risen since August, with the S&P 500 up 23 percent since Fed Chairman Ben S. Bernanke signaled the central bank would provide stimulus measures to boost the economy.

S&P at 2,854

In January, Laszlo Birinyi, one of the first money managers to advise buying U.S. stocks before they bottomed in March 2009, said the S&P 500 will rally to 2,854 on Sept. 4, 2013. Westport, Connecticut-based Birinyi Associates analyzes historical charts and patterns to make forecasts.

Curnutt, the New York-based chief executive officer of Macro Risk, said the firm’s view on stocks is “largely conditional” on the next policy response by the U.S. central bank. The Fed’s $600 billion program of buying Treasuries to stimulate the economy is ending this month. The S&P 500 could rise to 2,100 if the Fed decided it wanted it to, he said at the conference.

“One of the problems we’re having is asset prices are necessarily imposed with a tremendous amount of artificiality from the Fed, from the fiscal response,” Curnutt said.

--Editor: Nick Baker

To contact the reporters on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net; Sree Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


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