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April 13 (Bloomberg) -- The Standard & Poor’s 500 Index may rise 17 percent to 1,000 in the next three months as government spending boosts bank profits, investor Marc Faber said.
U.S. stocks probably reached their bear market low when the S&P 500 fell to 666.79 during trading on March 6, Faber, who publishes the Gloom, Boom and Doom report, told Bloomberg Radio in an interview from Thailand.
Financial shares may increase further after the S&P 500 Banks Index jumped 25 percent on April 9, the biggest rally since at least 1989. Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among more than 30 S&P 500 companies scheduled to announce results this week.
“You have essentially a government that gives financials free money at the expense of the taxpayer,” Faber said. “With this free money, they may actually have decent earnings in the near future.”
Banks in the S&P 500 are forecast to post an 86 percent drop in first-quarter earnings, according to analyst estimates compiled by Bloomberg. Profits are projected to fall 57 percent in the second quarter and 52 percent in the third before rebounding 277 percent in the year’s last three months.
“The market very near term has become somewhat overbought and the correction should essentially follow, but I doubt it will go and make new lows in the intermediate future,” Faber said. “The lows in early March at 666 in the S&P will hold and we’ll have another push up into July.”
Faber said in an interview with Bloomberg Radio on April 7 that the S&P 500 may drop as much as 10 percent after climbing 24 percent from 676.53 on March 9, its lowest close in 12 years. The index lost 2.4 percent that day, then climbed 5 percent over the next two. The 5 percent to 10 percent “correction” would be followed by a rally into July, Faber said in the interview.
U.S. stocks probably reached their bear market low when the S&P 500 fell to 666.79 during trading on March 6, Faber, who publishes the Gloom, Boom and Doom report, told Bloomberg Radio in an interview from Thailand.
Financial shares may increase further after the S&P 500 Banks Index jumped 25 percent on April 9, the biggest rally since at least 1989. Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among more than 30 S&P 500 companies scheduled to announce results this week.
“You have essentially a government that gives financials free money at the expense of the taxpayer,” Faber said. “With this free money, they may actually have decent earnings in the near future.”
Banks in the S&P 500 are forecast to post an 86 percent drop in first-quarter earnings, according to analyst estimates compiled by Bloomberg. Profits are projected to fall 57 percent in the second quarter and 52 percent in the third before rebounding 277 percent in the year’s last three months.
“The market very near term has become somewhat overbought and the correction should essentially follow, but I doubt it will go and make new lows in the intermediate future,” Faber said. “The lows in early March at 666 in the S&P will hold and we’ll have another push up into July.”
Faber said in an interview with Bloomberg Radio on April 7 that the S&P 500 may drop as much as 10 percent after climbing 24 percent from 676.53 on March 9, its lowest close in 12 years. The index lost 2.4 percent that day, then climbed 5 percent over the next two. The 5 percent to 10 percent “correction” would be followed by a rally into July, Faber said in the interview.
So I bought more this morning. Probably wil go down this afternoon:eek:
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