The Case For Stocks {One Man's View}

That one man is Jeff Saut of Raymond James.  This post comes to us via Business Insider.com.  According to Saut:  {Highlights in the quote below are not mine.}

"On the earnings front, the bottom up operating earnings estimate for the SPX is currently $107.58, leaving the SPX’s P/E ratio at almost 16x. Next year’s estimate is $121.66. If the SPX continues to trade at that P/E multiple it renders a price target of 1946. Moreover, so far of the 190 companies that have reported earnings, 60.5% of those companies have beaten estimates and 50.9% have beaten revenue estimates. As far as economics, as stated the numbers are probably going to be ignored for a few months because of the shutdown. However, I believe GDP growth will accelerate to 3% in 2014 driven by a capital expenditure cycle because companies like GM are running their plants flat out 24/7 and the equipment is wearing out. Finally, with Janet Yellen at the helm of the Fed it should be steady as you go. That implies no tapering and plenty of liquidity. And, a number of other things are going right in this country."

My comment: Our midpoint S&P 500 earnings estimate is $107.75 for 2013. and $114.75 for 2014.  My "14" estimate may be too low but $121.66 strikes me as aggressive.  One could counter that 2014 numbers may be low if we see GDP growth north of 3% next year.

*Long ETFs related to the S&P 500 in client and personal accounts.

Link:  Business Insider.com:  Jeff Saut's Bullish Case for Stocks.