“Hedge fund manager Doug Kass isn’t backing off his target for the S&P 500 of 1,345, despite the recent pop up to 1,367. It closed Wednesday at about 1,358.
“While I recognize the positive price momentum and the possibility of a further overshoot of my fair-value calculation, I remain cautious over the shorter term,” he writes on TheStreet.com.
“Indeed, the Greek debt agreement this week might very well mark a classic sell-on-the-news event.”
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He is sticking to his price range of between 1,250 and 1,550 for the year, calling his view “optimistic” for the intermediate term. Nevertheless, the S&P 500 now appears to be “overpriced,” Kass writes.
“I expect the index to be bound within a price range between 1,250 and 1,400 over the next few months,” Kass contends.
Even the so-called “Dr. Doom,” Nouriel Roubini, has turned bull, Kass points out.
He went on to list some of the points upon which he agrees with Roubini, including a higher oil price, increasing geopolitical risk in the Middle East, slowing economies in China and India, and the problematic issues of continued central bank easing and an unrealistic U.S. budget.
Stocks could plunge from here, says Sam Stovall, chief equity strategist at S&P Capital IQ.
“The market continues to work its way higher. We are knocking on the door of the April 29 recovery high. It feels like there are an awful lot of people calling for a correction — or at least a digestion — and I’m one of them,” Stovall told CNBC.”
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