Halfway through 2015 and the S&P 500 index is up nearly 3% at 2120. Expect it to end the year between 2150 and 2250 said Paul Christopher, chief international strategist at Wells Fargo Advisors. Why are stocks going higher in his opinion? Start with the economy and go on from there. ‘Leading indicators look good to us 6 to 12 months out. How about earnings? We think the Street was too pessimistic in the first quarter. Our year-end target for S&P earnings is $128 per share. That’s significantly higher than where we are right now,’ said Christopher. ‘Also breadth looks good. 21 out of 27 sectors are up over the last year. That sort of breadth you don’t find often.’ And don’t forget the Fed, which just this week once repeated its decision to postpone a rate hike despite a strong comeback in jobs and wages. ‘You really have to give the Fed some credit here,’ said Christopher. ‘They have been very careful and very patient. We think interest rates move very gradually higher and it won’t bother the market going forward.’ As to the best way to profit from the blue skies ahead, Christopher said stick to stocks that will most benefit from an economy that is not just recovering, but picking up a nice head of steam.
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