The President of Birinyi Associates Inc., Laszlo Birinyi predicts that the Standard & Poor’s 500 Index will perform even better in 2013 to surpass the record high. According to Birinyi, the US housing industry is already seeing expansion, the European markets are also on a recovering mode thanks to bank shares rallying past as much as 36% and individual investors’ are buying – on a whole this makes look the prospect of the US index brighter. Since March 2009, the benchmark gauge of the American equity has advanced by more than 107% and is currently within 11% of its previous record high.
Birinyi, the 69-year old Money Manager used to work for the Salomon Brothers Inc. and is currently sticking to the bullish forecast. He advised the same to his clients as well. Birinyi added that he is pretty comfortable with the current standing of the market.
According to statistics, more than $8.4 trillion has already been restored to the share values. Incidentally, last week, the S&P 500 Index experienced a drop of 1.9% and finished at 1402.23. In 2012, the benchmark index has posted an overall growth of 12%. This is better than the initially estimated surge of 6.9%. However, the economists are currently predicting the outcome of the budget deal negotiation as if the policymakers are not able to come into an agreement; many believe another recession will hit the biggest economy in the world. A concrete deal is yet to be finalized, but many think that the negotiations are going to yield some positive result.
The 2012 rally of the index was mostly led by the banks and brokerages companies which experienced a surge of 25%. The next on the list are the companies which depend on consumer spending as these shares jumped up by 19%.
The companies which were highlighted by Birinyi at start of 2012 have posted mixed returns. Both BlackRock Inc. and General Motors Co. have advanced (15% and 37% respectively). Incidentally, Birinyi asked the investors to buy these shares in January, 2012. However, two other picks made by him – People’s United Financial Inc. and Research In Motion Ltd. – both experienced losses.
Incidentally, it has been reported that around $275 billion was taken out of the US stock markets and the daily volume on American Exchanges was 6.4 billion in 2012 – the lowest since 2008.