The guy who predicted the 2008 financial crisis now has another, quite different prediction: stocks will rise..
Nouriel Roubini is quite a special guy. Here is what he had to say about the market:
Roubini: US Stocks Could Rise in Next Few Months
Tuesday, 15 Feb 2011 08:11 AM
Nouriel Roubini, the economist who predicted the financial crisis, said U.S. stocks may gain in the next few months as company earnings remain resilient.
“I think tactically for the next few months equities could rise because corporate profits are still strong,” Roubini, who is chairman and co-founder of Roubini Global Economics LLC, said in an interview on CNBC today, when asked for his outlook for the Standard & Poor’s 500 Index. “But the question is whether the economic recovery is going to be sustained and whether some of the risks we’re seeing down the line on the financial markets are going to materialize.”
The S&P 500 has climbed 5.9 percent this year, adding to the index’s 13 percent rally in 2010 as earnings beat analysts’ estimates and the Federal Reserve pledged $600 billion in asset purchases to boost the U.S. economy. The index closed at 1,332.32 yesterday, the highest since June 2008.
Seventy four percent of the 348 companies in the S&P 500 that reported results since Jan. 10 have topped analysts’ per-share profit predictions, according to data compiled by Bloomberg. Bank of America Corp. lifted its per-share profit estimates for S&P companies in 2011 and 2012 this week and said the gauge is “likely” to rise to 1,500 this year.
“Usually there is not a one-to-one relationship between the stock market and the economy, but I would say this year, some things are going well,” Roubini said. “The economy is improving, emerging markets are doing well, the corporates are doing well so far.”
He also said a “significant number” of downside risks remain, including higher commodity prices, the threat of inflation in emerging markets and “from the weakness that could come from housing and unemployment in the U.S.”