North American stocks will deliver another positive performance in 2013 with the U.S. setting the tone, according to a forecast from a Canada-based financial institution.
BMO Financial Group, Toronto, released this prediction today as part of an economic and market analysis of 2012. The forecast also calls for the following:
● The S&P 500 will attain a price target of 1,575 for 2013, up 9.38 percent from its current level, with earnings of $106.
● The S&P/TSX will reach 12,900, up 4.11 percent from its current level, with earnings of $900.
● Sectors in U.S. to watch include industrials, energy and information technology. Sectors in Canada to watch include financials and industrials.
● Given still low global interest rates, investors should look for stocks with strong dividend characteristics, both dividend yield and consistent dividend growth.
● The growth gap between the U.S. and Canadian economies—The U.S. grew faster than Canada's in 2012 for the first time since 2004—will widen in 2013. The forecast notes that the U.S. housing sector continues to recover—growing at its fastest pace in 30 years next year—while Canada's housing market continues to lose altitude.
● The equity market will deliver better returns in 2013, driven by continued economic growth and investor confidence.