I will not take it without the grain of salt, 33 year old analysts could be very wise, but what has he seen in this life? I will not touch financials, but they could lead the rally in Commodities and hard assets. Treasury Bubble could be apparent very soon with this kind of parabolic advance expecting quantitative Easing to bring yield further down. This is The Mother of Musical Chairs Game!Dec. 3 (Bloomberg) -- Global stocks will withstand a “full-blown” recession and surge in 2009 as cheap valuations and efforts by governments to restore confidence in the financial system lure investors back to equities, UBS AG said. The Standard & Poor’s 500 Index, which tumbled 42 percent to 848.81 this year, may rally 53 percent to 1,300 by the end of 2009, David Bianco wrote in a note dated yesterday. The New York-based strategist, who a year ago predicted a 2008 advance of 16 percent for the S&P 500, is now forecasting a gain that would exceed the index’s best annual performance on record.
The U.K.’s FTSE 100 Index may increase 41 percent from yesterday’s close to 5,800 in 2009, while the FTSEurofirst 300 Index may climb 25 percent from current levels, Zurich-based UBS said in separate notes. “The consensus outlook for 2009 is a full year of gloom,” Bianco, 33, wrote in his 2009 market outlook. “We believe 2009 will bring signs of a dawn in confidence with the first faint light appearing earlier than most investors expect.” The S&P 500 climbed 13 percent from an 11-year low on Nov. 20 as the government agreed to protect New York-based Citigroup Inc. from further losses and the Federal Reserve stepped up efforts to unfreeze credit markets. This year’s slump gives investors a chance to buy the biggest “growth” stocks in the S&P 500 at “deep discounts to intrinsic value,” according to Bianco, who recommends energy, technology and industrial shares. Cheaper Valuations The benchmark for U.S. equities is valued at 11.3 times the estimated earnings of its 500 companies, data compiled by Bloomberg show. The S&P 500 on average over the past five years has traded at 19.5 times the reported profit of its companies. The U.K.’s FTSE 100, which is currently valued at 7.4 times profit, may climb to 5,800 next year, based on a price-earnings multiple of 13, strategist Gareth Evans wrote in a separate note. Price-earnings valuations may climb to lift the FTSEurofirst 300 Index 25 percent from current levels, a team of London-based strategists led by Nick Nelson forecast. European per-share earnings will still tumble 25 percent as the euro-zone economy contracts 0.9 percent, they said. “The macroeconomic and corporate profit outlook for 2009 is horrible,” Nelson’s team wrote. “But share prices have moved well ahead of this and are now pricing in a multi-year recession/depression.” The brokerage also forecast gains for Latin American markets and recommended Brazilian equities. To contact the reporter on this story: Alexis Xydias in London at firstname.lastname@example.org.