Blackstone’s Wien Says S&P 500 Will Rally to 1,500 in 2012
The Standard & Poor’s 500 Index may reach 1,500 this year as the economy picks up momentum in the fourth quarter, according toByron Wien, vice chairman of Blackstone Group LP’s advisory services unit.
“Housing is bottoming, gasoline is down from the beginning of the year, 90 percent of the people in the country have jobs,” Wien said in an interview this morning on Bloomberg Television’s “In the Loop” show. “The European situation is getting better, not resolved, but getting better.”
Wien’s prediction implies a 6.8 percent rally in the S&P 500 from yesterday’s closing level of 1,403.93. The index is up about 12 percent this year amid speculation central banks will continue to support the global economic recovery if needed. The U.S. equity benchmark was little changed today after a two-day decline.
Wien has been making annual forecasts since 1986, when he was chief U.S. investment strategist at Morgan Stanley. His average score is five out of 10, he said in a Blackstone webcast in January.
The fiscal cliff will be deferred, Wien said, referring to higher taxes and spending cuts that will take effect at year-end unless Congress and the White House reach a deficit-reduction agreement. He also predicted the European Union will be broken up or restructured in the next 10 to 12 months. That may spur a rally in stocks on optimism that the region’s debt crisis is resolved.
Wien said he remains bullish on gold on speculation that the metal will rise as stimulus measures by central banks around the world will weaken currencies. Gold futures advanced 0.3 percent to $1,604.60 an ounce today after a U.S. report showing stagnant consumer prices bolstered prospects that the Federal Reserve will take further steps to spur growth, reviving inflation and demand for the metal as a hedge.
Shares of companies that supply building materials are poised to rally as the U.S. housing market recovers, Wien said. Economic data today showed confidence among U.S. homebuilders climbed in August to the highest level in more than five years, affirming the improvement in residential construction. An S&P measure of 11 homebuilder stocks has rallied 53 percent in 2012.
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