Bloomberg News

Birinyi Says U.S. Stocks May Mirror 1995 Rally Amid Debt Concern

February 13, 2012

Feb. 13 (Bloomberg) -- U.S. stocks may extend gains this year and mirror the performance of 1995, when the Standard & Poor’s 500 Index rallied 34 percent even after Mexico devalued its currency and Treasury yields dropped, Laszlo Birinyi said.

Improved investor sentiment, central-bank actions and optimism that U.S. economic data will beat estimates, will sustain gains even after the best January for the S&P 500 since 1997, the president of Birinyi Associates Inc. in Westport, Connecticut, said in a Bloomberg Television interview today.

“We still think you should buy stocks,” the fund manager said in London. “It’s a continuation of the bull market and we’re encouraged by what we are seeing in Europe. I look at the markets, I find they are strong. There’s real buying going on. This is not short-covering or a temporary or transitory thing.”

The S&P 500 has climbed 6.8 percent so far in 2012, including a 4.4 percent rally last month, on expectations the global economy will withstand the impact of the euro area’s debt crisis and as central banks lowered funding costs for lenders. Futures on the gauge for American equities climbed 0.7 percent at 11:40 a.m. in London today.

“People took a hard look and found that things are looking a bit better,” said Birinyi, who advised holding stocks in August as the U.S. government was stripped of its AAA credit rating and strategists cut forecasts faster than any time since the credit crisis. “It’s the realization that the one thing we all agreed on was that the U.S. economy is not going to do very well. Well, that could be the real surprise for the year.”

The fund manager reiterated recommendations to buy General Motors Co., Research In Motion Ltd., Hermes International, People’s United Financial Inc. and BlackRock Inc.

--Editors: Srinivasan Sivabalan, Alan Soughley

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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