2. Barron's kicks of the week with plenty of Wallstreet moron propaganda st-rat-egist's expressing their bullish views. THe very same ones who made dead wrong calls a year back just to quote quickly the Goldman guy who argued earnings for 2009 around 45$ and for 2010 even lower around 42$ for the SPX , reminding that to be cautious was the right way to be - that was back in March as Abby Cohen the ever bullish Goldman strategist was removed from that duty.
Excerpt from Barron's
The strategists we surveyed expect S&P 500 companies to earn a collective $76, on average, in 2010, 24% higher than this year's anticipated operating profit of $61.33. Analysts have spent the fall upgrading their stock recommendations, so investors can't count on more upgrades to goose prices in the months ahead.
There is no shortage of other supports, however. Only a quarter of the $787 billion federal stimulus package approved early in 2009 has been spent so far, and the bulk will be deployed next year. When its impact fades in the second half, the government, wisely or not, can extend further aid. Goldman Sachs sees an additional $250 billion in stimulus in the next three years.
Goldman's economists hardly are oozing optimism; they expect below-consensus GDP growth of 2.3% next year, and unemployment to peak at 10.8% in 2011. Yet the firm expects S&P 500 revenue to grow by an above-consensus 8.9% in 2010, and by 7.4% in 2011, helped by expansion in overseas markets. U.S. companies earn a third of their sales abroad, with demand particularly strong in the BRIC economies of Brazil, Russia, India and China, where GDP could grow 9.2% in 2010.
Corporate cash also could provide ballast for the stock market. American corporations slashed capital spending by 16% in 2008 and another 32% this year. As a result, cash now makes up 9.7% of their assets, well above the historical norm near 6.2%. "The balance-sheet recession is ending in more sectors than just financials," says Michael Hartnett, BofA Merrill Lynch's chief global strategist. With the ratio of corporate profits to capital expenditure at a record 117%, cash increasingly will be steered toward mergers, capital spending and dividends, all of which support stocks.