The Dow Jones is taking it on the chin today, dropping nearly 200 points as a stock market responds to weakness in emerging markets. But even with the pessimism on Wall Street this week, the stock market bulls were everywhere Thursday as top Seattle stock brokers gathered at the Metropolitan Grill for the 31st annual “Guess the Dow” competition.
All but one of the stock pros predicted that the Dow would end this year above the 2013 close, which came in at 16,576. (It is at about 16,000 today). One broker, Eric Brewe of RBC Wealth Management, even predicted that it would flirt with 20,000.
“I am a bull on America,” said Brewe, adding that there’s just “way too much cash on the sidelines.” And that corporate cash “will be the fuel for economic growth in 2014.”
Tech companies are especially cash rich, and that’s one of the reasons why Diane Daggat of McAdams Wright Ragen thinks the market will soar to 18,500 at the end of the year. Her top picks for the year in the Northwest included Concur, F5 Networks and Tableau.
Of course, all of this will be determined by the winner of the Super Bowl, right? The old theory goes that if a team from the NFC wins the Super Bowl, the markets will go up. That team, of course, is the Seattle Seahawks. No wonder that nine of the 10 stock pickers from Seattle picked the home. They are not only bulls, they’re Hawks too.
Here are the other predictions from the stock pickers, with their favorite stocks from the Northwest:
Jeffrey Atkin, KKRA
Dow close: 17,803
Top stock picks: Emeritus, Itron, Electro Scientific
Quote: “I am not afraid of the market, and I think being up five to six percent is reasonable.”
Eric Brewe, RBC Wealth Management
Dow close: 19,275
Top stock picks: Paccar, Tableau, RealNetworks
Quote: “I am a bull on America.”
Diane Daggat, McAdams Wright Ragen
Dow close: 18,500
Top stock picks: Concur, F5, Tableau
Quote: “The tech sector is especially attractive with lots of cash on their balance sheets.”
Shaun Dennehy, McAdams Wright Ragen
Dow close: 17,469
Top stock picks: Seattle Genetics, Blucora, Micron
Quote: “Continued low interest rates make equities the choice for investors.”
Joel Ferrell, Morgan Stanley
Dow close: 18,041
Top stock picks: Expeditors, Paccar, Nordstrom
Quote: “The headwinds of rising rates, Fed tapering, mid-term elections in the fall and increased geo-political strife will keep the equity market advance in check.”
Mary Ann Heeren, RBC Wealth Management
Dow close: 18,133
Top stock picks: Nanostring, Schnitzer Steel, Zulily
Quote: “U.S. interest rates will rise, but not to levels that choke off our economic recovery.”
Matthew Kelleher, Morgan Stanley (Last year’s Dow winner)
Dow close: 18,100
Top stock picks: Columbia Banking; Alaska Air, Schnitzer Steel
Quote: “Market continues up as rates stay relatively low and earnings improve.”
Lynn Lindsay, Morgan Stanley
Dow close: 18,431
Top stock picks: T-Mobile, F5 Networks, Home Street Bank
Quote: “PE expansion and modest earnings growth (will) fuel this upward trend.”
Matt Rudolf, Summit Capital
Dow close: 16,999
Top stock picks: Resolute Forest Products, F5 Networks, Coeur d’Alene Mines Corp.
Quote: “I am a worrier by nature, and I lose sleep that we can’t decouple from the rest of the world.”
Bill Smead, Smead Capital Management
Dow close: 16,200 (only person to pick the Dow to go down this year).
Top stock picks: Nordstrom, Gannett, Washington Federal
Quote: “The U.S. economy and Northwest economy will be better than expected. Retail advertising and lending will do well.”