A little thing like a U.S. credit rating downgrade won’t shake pundits off their 2011 prediction for the broad market. They’re still expecting a 17% rise for the year in the S&P 500.
Cambiar Investors’ Brian Barish said last December that energy and agriculture would fuel a “multi-speed recovery,” causing a rise in the S&P 500. The prediction at the time put Barish in agreement with other high profile money managers, most notably Ken Fisher, who said the broad market would rally by 17.5% in the next 12 months.
Fisher and Barish’s view was in opposition to the “new normal” theory of the economy championed by Pacific Investment Management Co., which said growth will be relatively slow in coming years.
However, despite the U.S. downgrade by S&P on Friday and resulting market swoons, chief strategists at 13 banks still said they see the broad market benchmark of American equities reaching 17% through Dec. 31, according to a Bloomberg survey. The news service reports “their projection that the index will reach 1,401 hasn’t budged in four weeks, while mounting concern U.S. growth is slowing drove the S&P 500 down 11% since July 22, including [Thursday’s] 4.8 % tumble.”