Byron Wien: The S&P 500 Could Top 1400 By the End of the Year
Blackstone Advisory Partners Vice Chairman Byron Wien was on Bloomberg Surveillance with Tom Keene discussing the economy, stock market, and gold.
Wien said the ideas of Carmen Reinhart and Kenneth Rogoff are coming to pass in that we have a debt/GDP ratio of close to 100%; and probably worse if you count contingent liabilities. On that basis it will hard for us to grow three percent and it will probably be closer to two percent, he added.
Keene asked Wien if corporate profits could sustain, even at single digits, in this environment. Wien said he expects S&P 500 earnings to be around $100, but the question is what the growth rate will be. He believes earnings will match the nominal growth rate of around four percent, and possibly a little more.
Regarding the stock market, Wien said he expects the second half to be better than the first half. He believes the S&P 500 could top 1400 and added that when everyone is so negative, it usually pays to take the other side.
Wien said if you look back at the last three summers the data was pretty negative, while the fall was quite strong, and he’s hoping for the same thing this year.
Regarding gold, Wien said he still likes it because people will want to own something real. Keene asked Wien if shares in JP Morgan were real. Wien said JP Morgan shares were real, but they’re shares which is paper, while gold is something hard.
The interview continued with Wien commenting on the political challenges in Europe and the U. S., how long Greece will stay in the European Union, how he defines crisis in the market (“a total panic where even he turns bearish”), the last time he was bearish, the sectors that are most attractive now, why we won’t see inflation for awhile, and the one question he would ask Jaime Dimon now.