In a Bloomberg survey of a dozen financial strategist representing the likes of UBS AG, Barclays Plc and Oppenheimer & Co., the average estimate for the S&P 500 during the fourth quarter is quite bullish.
According to the report (find it here) the S&P 500 will climb 14 percent over the last three months of 2011 in response to excessively low values.
Analysts are saying (and rightly so, for what my opinion is worth) that the debt crisis in Europe combined with August’s haggling over the debt ceiling and subsequent debt downgrade by Standard and Poors is responsible for the third quarter’s huge drops in the major stock indexes. As such, many companies’ stock is under-valued, making this a major buyers market.
The last time the S&P 500 Index gained 14 percent over one single quarter was in 1998. Also from a historical perspective, often when the stock market approaches a bear market, there is a big rebound following what investors view as opportunistic market conditions.