Today, July 15th, the S&P500 opened at 1,680. So, BOA is calling for a 70 point increase in the S&P, which is about 4.2% increase. At 1,750, the S&P500 would have increased about 323 points in 2013 or about 22.7%.
The question is whether equity markets will remain strong after the Fed changes its low interest rate support.
Bank of America Merrill Lynch is calling for additional upside for the S&P 500 Index. The firm’s new price target for 2013 is 1,750 versus a prior target of only 1,600. While the 1,600 level is lower than the current handles around 1,680, it is actually well above where the S&P 500 closed out 2012 at 1,426.19. Today’s stock market upgrade is from the Merrill Lynch Macro/Investment Strategies team. It is remaining bullish on stocks with an expectation for modest upside from current levels.
The report is “attributable to expected earnings growth, contrasting with returns so far this year driven by multiple expansion. Our revised ERP of 475bp still conservatively assumes elevated risk versus average pre-crisis levels. We now also use our multi-signal target model framework to determine a 12- month target that provides increased visibility on our market outlook beyond the current year. We have modified our earnings estimate revision…
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