By Whitney Kisling and Thomas R. Keene
Aug. 24 (Bloomberg) -- The economy’s rebound will be stronger than most forecasters expect, Laszlo Birinyi said, citing the rally that pushed the Standard & Poor’s 500 Index to the highest level since October.
“The markets are suggesting that the economy has turned the corner and is going to do a lot better than most people anticipate,” Birinyi, the founder of Westport, Connecticut- based research and money-management firm Birinyi Associates Inc., said today in an interview broadcast on Bloomberg Radio and Television. “I’m still very optimistic.”
Birinyi said on May 20 that the S&P 500 would climb to a record 1,700 in the next two or three years, a 65 percent gain from its current level. The index has rallied 14 percent since his forecast. The benchmark for U.S. stocks may rise 5.5 percent to 1,087 within the next three months “if it continues to progress at the rate it’s been progressing,” he said.
His remarks followed comments from Nouriel Roubini, the New York University professor who predicted the financial crisis. Roubini said the odds have increased that the economy, after improving this year, will worsen.
“There are risks associated with exit strategies from the massive monetary and fiscal easing,” Roubini wrote in the Financial Times today. “Policy makers are damned if they do and damned if they don’t.”
‘Formally Over’
The global economy will bottom in the second half of the year, and the recession in the U.S., U.K. and other European countries won’t be “formally over” before the end of 2009, Roubini said.
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