Goldman's Cohen Sees Calmer Market, Gains
Filed at 3:28 p.m. ET
By Reuters
WASHINGTON - Influential Wall Street analyst Abby Joseph Cohen said on Tuesday that volatility in U.S. stock markets should settle down as investors complete an "attitude adjustment" on the U.S. economy and stock prices.
"The last several weeks have been extremely volatile and we believe that much of this adjustment process is now over," Cohen, who chairs the investment policy committee at Goldman Sachs, told the Economic Strategy Institute in Washington.
"We believe that at current stock price levels, returns from this point should be good," she added.
Cohen reiterated her year-end 2000 forecast for the the Standard & Poor's 500 index of 1,575 and her spring 2001 target of 1,625, saying the stock market was now, "priced close to where it should be."
"We believe the starting point now is of relatively sensible valuation in which ... investors now have a clearer, and by the way a more appropriate, view of the performance of the economy and the stock market," she said.
"That being the case, we think the stock market going forward will generate good returns, but not necessarily abnormally large returns," Cohen added.
She did note that, while the recent stock price swings might be settling down, in the longer term volatility would not likely return to the very low levels of the mid-1990s.
"Now that volatility has picked up, let us recognize that these numbers are in fact closer to the historical trend rather than that very calm period we all enjoyed so much earlier in the 1990s," Cohen said.
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Carl
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