As 2015 starts to unwind, it’s as a good time as any to check in with professional investors for a sense of where the markets are heading in 2016.
Barron’s latest Big Money biannual survey of professional investors offers a remarkably upbeat assessment.
It’s remarkable because markets have been volatile in recent months on worries about the Chinese economic slowdown, rising geopolitical tensions in the Middle East and uncertainty about Federal Reserve monetary policy.
US Earnings
Overall, the consensus forecast is for the stock market to rise from current levels as of October 16 by as much as 7% through the middle of 2016.
What will power these gains?
A US economy on solid footing, plus corporate profits growing at a decent click, and opportunities in the hard-hit energy and financial sectors.
Roughly 49% of those surveyed think corporate profits will propel stocks higher.
Some 25% think US GDP growth will do the trick.
Favorite Stocks
According to the Barron’s braintrust, crude-oil prices are poised to gain 11% over the next year. On top of that, the housing market will remain robust.
Their favorite stocks? They include Apple (AAPL), Twitter (TWTR), Gilead Sciences (GILD), Procter & Gamble (PG), and Bank of America (BAC).
China Bears
Most professional investors surveyed by Barron’s expect the S&P 500 Index to be the best performing index over the next 12 months.
Outside the US, professional investors are most bullish about European and Japanese stocks.
However, they’re bearish about China, which has seen its economy decelerate in recent quarters.
Takeaway
The US stock market is the place to be next year for investors, according to the Barron’s latest Big Money biannual survey of professional investors.
Solid economic growth and earnings will make US stocks more attractive than foreign counterparts.
Look for a potential rebound in energy prices and steer clear of China, the money pros contend.
Continued Learning: Behind Wall Street’s rah-rah mood on stocks
Photo Credit: Olin Gilbert via Flickr Creative Commons
The investments discussed are held in client accounts as of October 19, 2015. These investments may or may not be currently held in client accounts. The investments are presented for discussion purposes only and are not a reliable indicator of the performance or investment profile of any composite or client account. Further, the reader should not assume that any investments identified were or will be profitable or that any investment recommendations or that investment decisions we make in the future will be profitable.
