The Standard & Poor’s 500 Index will rally 6.9 percent through the end of next year as the probability of a recession in the world’s largest economy has decreased, Credit Suisse Group AG (CSGN) said.
The equity research team at the Swiss investment bank raised its estimate for the benchmark U.S. stocks gauge to 1,340 from 1,260 for the end of 2012. The team, led by Chief Global Strategist Andrew Garthwaite, increased the estimate for this year to 1,270 from 1,180. The probability of a U.S. recession has fallen to 25 percent from 35 percent, Garthwaite wrote in a report today.
“U.S. macro surprises are positive for the first time since April,” London-based Garthwaite wrote. “The European deal -- though problematic on details -- has shown that Europe is able to come up with credible policies when forced.”
The S&P 500 has rallied 14 percent from this year’s lowest level on Oct. 3 as euro-area leaders said they will boost the capacity of the region’s bailout fund in a bid to stem the debt crisis, while companies from Google Inc. to BASF SE increased earnings. U.S. gross domestic product expanded 2.5 percent in the second quarter, almost double the previous period’s rate, the Commerce Department said on Oct. 27.
The benchmark U.S. equities gauge slid 2.5 percent to 1,253.3 yesterday.
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