Best of the Week
Most Popular
1.RED ALERT: Paris Terror Attacks - What to Expect Next - STRATFOR
2.Paris Terror Attacks, Death Pangs of a Dying Religion, and Impact on BrExit EU Referendum - Nadeem_Walayat
3.Paris Terror Attacks, Islamic State Attempting to Spark Civil War in France - Nadeem_Walayat
4.Three Shocking Charts That Prove Gold Price Rally Is Coming - Sean Brodrick
5.Stock Market Nifty-Fifty Becomes Fab-Five; Return of the 'Four Horseman' - Mike_Shedlock
6.Africa Population Explosion - Why Europe's Migrant Crisis is Going to Get A Lot Worse - Video - Nadeem_Walayat
7.Gold Mining Stocks May Be The Buy Of The Century - Jeff_Berwick
8.Grandmaster Putin Beats Uncle Sam at His Own Game - Mike_Whitney
9.BRICS? No, CRISIS - Raymond_Matison
10.UK Housing Market Affordability, House Prices Momentum and Trend Forecast - Nadeem_Walayat
Last 5 days
Sheffield, Yorkshire and Humberside House Prices Forecast 2016-2018 - 25th Nov 15
Investors Watch Out For The Auto Industry… - 24th Nov 15
BEA Revises 3rd Quarter 2015 US GDP Economic Growth Upward to 2.07% - 24th Nov 15
Stock Market Supports Are Being Broken - 24th Nov 15
Is Gold Price on the Verge of a Breakout? - 24th Nov 15
Fed’s Tarullo: U.S. Interest Rates Liftoff Should Wait for Signs of Inflation - 24th Nov 15
Silver Price, COT, US Dollar Updates and More - 24th Nov 15
UK Regional House Prices Analysis - Video - 23rd Nov 15
Crude Oil Swinging For The Fences - A 20 to 1 Option Play - 23rd Nov 15
US Dollar, CRB, Oil, Gas, Copper and Gold - The Chartology of Deflation - 23rd Nov 15
UK Regional House Prices, Cheapest and Most Expensive Property Markets - 23rd Nov 15
Stock Market Rally Losing Momentum? - 23rd Nov 15
Will Gold Price Drop Below $1000 Soon? - 23rd Nov 15
Gold and Silver Sector Big Green Light and Low Risk Entry Setup... - 23rd Nov 15
Limits to Economic Growth - Challenge and Choices - 22nd Nov 15
Long Dollar Trade and Current Copper Price Below Cost of Production - 22nd Nov 15
UK Housing Market House Prices Affordability Crisis - Video - 21st Nov 15
The Fed Has Set the Stage for a Stock Market Crash - 21st Nov 15
Stock Market Primary V Wave Continues - 21st Nov 15
Gold And Silver - Value Of Knowing The Trend - 21st Nov 15
UK Footsie Bulls Set To Foot The Bill - 21st Nov 15
UK Housing Market Affordability, House Prices Momentum and Trend Forecast - 21st Nov 15
GDX Gold Miners’ Strong Q3 Results - 20th Nov 15
End of Schengen, Stock Market’s Technical Strength Grows - 20th Nov 15
Justice for All and The Curious Case of Zambia - 20th Nov 15
Paris, Sharm el-Sheikh, and the Resurrection of Old Europe - 20th Nov 15
Silver Prices and The Management of Perception - 20th Nov 15
Stock Market Nifty-Fifty Becomes Fab-Five; Return of the 'Four Horseman' - 20th Nov 15
Waiting for Goldot Again - 20th Nov 15
Michael Curran Goes Down-Market Shopping for Gold Stock Winners - 20th Nov 15
Why Isn’t This Incredibly Bearish Bond Market Development Making the News? - 19th Nov 15
SPX Appears to have Stopped its Rally - 19th Nov 15
The Great Fall Of China Started At Least 4 Years Ago - 19th Nov 15
Using Elliott Waves: As Simple As A-B-C - 19th Nov 15
Has Deflation Been Ddefeated? - 19th Nov 15
Dow Jones Stock Market Index is Not Going to Crash - 19th Nov 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

Reasons to Get Excited About Japanese Stocks

Stock Market Forecast For 2014

Companies / Stock Markets 2014 Dec 09, 2013 - 10:14 AM GMT

By: Money_Morning


Michael A. Robinson writes: If you’ve been following our twice weekly conversations here at Strategic Tech Investor, you know that I’m very bullish about technology stocks.

But I want to let you in on a little secret …

I’m also bullish about the overall stock market.

In fact, I’m predicting that the Standard & Poors 500 Index will advance 15% in 2014, rising from the current 1,795 to 2,065. That will not only take the closely watched index up through the psychologically important 2,000 level, it will take it to the highest level in history.

And that’s the broad market index.

I believe that the tech sector could do even better.

So let’s spend today talking about my prediction – and conclude our talk by looking at an aggressive tech stock that I believe will trounce the market averages in the New Year.

The Zooming Markets

If you’re getting nervous in the face of this historic market rally, I can certainly understand. Over the past five years, the S&P has gained 105%. The index is up nearly 23% so far this year.

But you can also have some confidence in my forecast.

Back on June 28 – a point at which tech-sector analysts and other market pundits were increasingly predicting that the rally in technology shares would end – I told you to expect a big second half of the year for tech stocks.

Since that time, the tech-focused Nasdaq Composite Index has zoomed 19.5% – versus 11.8% for the S&P.

What I’m telling you now is that the overall stock market should continue to surge in 2014.

If you drill down and look at the facts, there’s simply no reason to let fear get the better of you. Signs that the economy – and the stock market – will remain healthy are everywhere.

Take what’s happening with lumber. Prices recently hit a seven-month high of $378.30 per thousand board feet.

And there’s a very good reason why demand for lumber is so strong. In fact, it’s one of the three reasons I’m going to share with you that gives me such confidence that the American economy – and the stock market we keep score by – will continue to display muscle.

Housing Heats Up

Of all the factors that affect the economy and the stock market these days, the housing sector remains by far the most emotional.

Quite literally, it hits people right where they live.

If you happen to live in parts of Houston or Chicago – where real estate values are predicted to remain flat or slightly down this year – then national stats don’t make you feel all that much better.

On the other hand, there’s just no denying the impact that a strong national market for real estate can have on the economy.

When people buy new homes they end up purchasing a lot of furnishings: refrigerators, dishwashers, security systems, furniture and more. They also hire painters, designers, electricians and carpenters.

Consider that construction employment totaled 5.83 million workers in October, an increase of 185,000 from a year earlier. The Associated General Contractors of America, a trade group, says that was the sector’s highest jobs level since August 2009.

A look at the underlying numbers tells you why.

The National Association of Realtors (NAR) just reported that home sales were up 6% in October on a year-over-year basis – with sales reaching 5.14 million units. Even more important: On a year-over-year basis, that October advance means that housing sales have now increased for 28 months in a row.

Rising home values just make people feel richer. Economists refer to it as the ‘wealth effect’ and have proven that it correlates with increases in car sales or growing investments in the stock market.

Automakers Put the Pedal to the Metal

The last time I talked to you about my next-door neighbor Steve, he was busy cutting down Eucalyptus trees.

That was back on Sept. 13. At the time, we talked about how Steve’s willingness to spend thousands to cut down trees in order to better the view from his window was a good sign for investors.

Since that time, the S&P 500 has gained 7%. For the average investor that would normally be a great year. Data compiled by the St. Louis Fed shows that the average compound rate for the market in the decade ending last year was 7.02%.

That’s why Steve’s decision to buy a new Infiniti sedan is so important for the market – and for the U.S. economy.

The spinoff benefit from new car sales is huge.

Today’s new vehicles are essentially innovation on wheels. Take a car or truck a part today and you find a bevy of semiconductors, advanced sensors, sophisticated in-dash multi-media “infotainment systems,” not to mention GPS and blue-tooth integration with your mobile device.

Truth be told, Steve’s decision to get a new car is part of a huge national trend.

Auto analyst J.D. Powers & Associates notes that the U.S. car market saw $1 billion in sales every single day in November. The industry’s $30 billion cash inflow was up 10% from last year and its sales for the month were a record.

Thanks in part to “Black Friday” sales incentives – but also fueled by intriguing new models – American auto sales zoomed to an unexpectedly high annualized selling rate of 16.4 million in November. That was well ahead of the 15.3 million estimated in October, according to Autodata.

In a conference call with analysts and journalists, General Motors Chief Economist Mustafa Mohatarem said that a stable labor market, stable oil prices and record household net worth numbers contributed to the increase.

Expect car sales to remain strong for some time to come: My buddy Steve had been keeping his aging Nissan truck running by spending way too much money at the repair shop.

And many other Americans are doing the same thing: Research firm Polk notes that the average age of cars on the road today is an exceptionally long-of-tooth – 11.4 years old.

Electronic Gadget Sales Are Zooming

Gadgets are luxury items – and purchases soar when consumers are confident.

That’s what we’re seeing now. Apple Inc. (Nasdaq: AAPL) shares have surged nearly 40% since June, is having a great holiday season, and will enter the New Year with enormous momentum behind it.

Apple sold a record 9 million iPhones in a single weekend when two new versions launched in September. If my recent visit to a local Apple store is any indication – and I think it is – Apple will enjoy a great Christmas and an even better New Year.

There’s also the videogame sector, which is benefiting in a big way from having two new gaming systems introduced in November. The Sony Corp. (NYSE ADR: SNE) PlayStation 4 and the Microsoft Corp. (Nasdaq: MSFT)Xbox One are both new to the market this year.

Respected market researcher Gartner says the global video market will hit $93 billion this year, up nearly 18% from $79 billion last year. And there’s still more growth ahead: Gartner is forecasting another 19% increase by 2015 when the sector – computer and smartphone games, software titles and the actual gaming consoles – will reach $111 billion in sales. Consoles still rank as the largest segment of the market with projected 2013 sales of $44.3 billion – or roughly half the entire industry.

When folks feel secure – as these statistics and anecdotes seem to show – they buy more “stuff.” That’s bullish for corporate profits – and for stock prices.

Consumers are also more willing to invest when they feel flush, funneling liquidity into stocks – also bullish.

I’m very optimistic about the overall stock market. And, as is usually the case, the tech sector will continue to lead the way. Biotech, Big Data and Cloud Computing firms will also increase sales, profits and stock prices next year.

So let’s talk about a great profit play that I believe will benefit from all we’ve talked about here today. It’s a small firm, meaning the risk will be higher than normal. But the company’s high-growth rate, and ability to generate profits means this $23 stock will have a lot of running room in 2013.

Cashing In

The company in question is Ambarella Inc. (NasdaqGS: AMBA), a nimble small-cap firm that makes semiconductors for video compression and image processing. The company’s chips are used in high-definition (HD) video cameras for sports and security, as well as in digital still cameras and automotive video recorders.

The company recently introduced a new chip for the consumer digital video market for what are called “4K cameras,” which have four times the resolution of today’s HD video cameras.

With a market cap of $652 million, Ambarella has increased earnings per share (EPS) by 27% over the past three years. At that rate, earnings — and the company’s stock price – could double in less than three years.

Stocks aren’t the only investment that I’m watching.

In fact, I’ve got my eye on a phenomenon that is white-hot right now.

I’m referring to “Bitcoins.”

If you’ve been following the headlines about bitcoins of late, you know that the “virtual currency” has soared from $131 to $1,150 in just the past two months – a return of 778%.

It’s one heck of a story.

And I’ve got an amazing way for you to learn all about it. Take a look here and you’ll see what I mean.

Source :

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2015 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History