Bloomberg (fading AAII sentiment ratio) and at the Reuters Investment Summit (next bubble could be in corporate bonds, or stocks post 2011), JP Morgan's Chief US Equity Strategist Thomas Lee sees "relative value of stocks verses their own corporate bonds". He thinks the "S&P will trade at at least 14.5x 2011 earnings by year end, which would be $90 (EPS), so it's roughly $1,300 by year end". Lee sees upside to cyclical groups (steels, technology, basic materials, financials).
However, Tom said, "I think it's going to be very important for any forecast of 2011 earnings to not have Europe enter a recession. We cut our forecast to Europe last week actually from about 2% growth for the next few( 3?) quarters to 1%. We do think that the crisis will slow down growth but will not lead to a recession." Click here for recent posts on Thomas Lee. Video courtesy of CNBC.com.