Barron's Recap (12/15/12): Outlook for 2013
This weekend in Barron's online: the outlook for 2013 and the prospects for Johnson & Johnson, Hudson Bay, Tronox and South Korea.
"Outlook 2013" by Vito J. Racanelli.
Ten strategists recently polled by Barron's expect more gains ahead next year. Even if no fiscal cliff deal is reached by the end of this year, the bulls are more bullish about the year ahead than they were a year ago, while the bears are somewhat less bearish. Most the strategists have 2013 year-end targets for the S&P 500 above the all-time high of 1565. Some of them place it above 1600. But this optimism comes despite predictions of only moderate growth next year in corporate earnings.
But the uncertainty ahead of the presidential elections is over, concerns about Europe's sovereign debt have eased, and some economic data suggest that economies, particularly that of China, have bottomed. The strategists expect a deal on spending cuts and taxes to be reached early in the new year. Corporate spending and hiring could begin to rebound after that, and economic growth could accelerate. Sectors to watch include tech, industrials and energy. But traditionally defensive sectors like consumer staples, telecoms and utilities are expected to underperform.
"Why J&J's Not Just a Band-Aid" by Andrew Bary suggests that after Johnson & Johnson's (NYSE: JNJ) missteps alienated investors, including Warren Buffett, Wall Street now is taking a brighter view. The stock could be poised for solid growth.
In "Asia's Cheapest Market Is Drawing Fresh Interest," Kopin Tan takes a look at South Korea, one of the few developed nations that avoided recession during the global crisis. Outdated perceptions about the nation have kept investors away, but that is changing.
Jack Willoughby's "Rediscover Hudson's Bay" says that the Toronto-traded stock may be worth another look, even though the famous Canadian retailer's recent initial public offering failed to stir skeptical investors.
The shares of Tronox (NYSE: TROX) could double or even triple as sales of titanium dioxide, a key paint ingredient, revive. So says investor Meryl Witmer in "A Pigment for the Imagination" by David Englander.
In Jack Hough's "The New Safe Stocks," four stocks with comfortable valuations are offered, despite defensive sectors like utilities and consumer staples being bid up as investors rush to avoid risk. They include Aflac (NYSE: AFL), Nasdaq OMX (NASDAQ: NDAQ) and Western Union (NYSE: WU).
"Climbing the Muni Ladder" by J. R. Brandstrader is a profile of Chris Ryon, co-manager of the Thornburg Limited-Term Municipal Fund. Ryon explains how the fund succeeds by "laddering" its portfolio over 10 years.
Sandra Ward's "Remaking the News" turns the CEO spotlight on Gannett's (NYSE: GCI) Gracia Martore, who has been courting Wall Street and leading the media company and publisher of USA Today aggressively into the digital age.
Veteran market analyst Laszlo Birinyi is interviewed in Lawrence C. Strauss's "Three Stocks for an Aging Bull Market." Birinyi feels the bull is fading, but he still has his eye on Walgreen (NYSE: WAG), Sears Holdings (NASDAQ: SHLD) and Apple (NASDAQ: AAPL).
"Wrestlers in the Ring" is an editorial commentary by Thomas G. Donlan suggesting that the latest round of federal budget negotiations will not produce a better result.
Columns in this weekend's Barron's discuss:
- Likely fiscal cliff outcomes
- Prospects for the markets in 2013
- Who is on top in fiscal cliff negotiations
- Prospects for tech stocks in 2013
- How to maintain a robust portfolio
- Picking ETFs decoupled from the markets
- The effect of tax refund delays
- A rebound in Russian stocks
- A record year for special dividends
This weekend's Barron's online exclusives include:
"Adobe Soars Above the Cloud" by Teresa Rivas. Shares of Adobe (NASDAQ: ADBE), maker of Photoshop, rallied to a 52-week high Friday on better-than-expected fiscal fourth-quarter results. However, the article suggests, the best is yet to come for investors. The quarterly results showed the company's great progress in transitioning to Internet-based products, and the stock should rise further.
"When Big Givers Pull Together" by Christiana Cefalu. This Penta article takes a look at Living Cities, a philanthropic collective made up of 22 foundations and financial institutions. Its goal: "to improve the lives of low-income people and increase economic opportunity in cities across the U.S." The article examines a few of the organization's projects. CEO Ben Hecht says Living Cities can make a social impact "that no one of our members would do on their own."
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