Pimco exec says stocks could gain 15%

A benign inflationary environment and a slow tapering by the Federal Reserve are 'very bullish for equities,' Virginie Maisonneuve says.

By MSN Money Partner Mar 28, 2014 1:43PM
Financial Stock Chart © Kick Images, Photodisc, Getty ImagesBy Bruno J. Navarro, CNBC

The Standard & Poor's 500 Index ($INX) has another 10 to 15 percent more to gain through year-end, and emerging markets are increasingly attractive, Pimco's deputy CIO and global head of equities said Friday on CNBC.


On "Halftime Report," Virginie Maisonneuve said she was "quite positive" on the dollar and noted the potential of the Japanese yen and the euro to head lower.


"A strong euro is not good for Europe, and we know that Europe is ready to add QE if it needs," she said. "I think in U.S. dollar terms, a 10 percent return between now and the end of the year a makes sense."


Maisonneuve also noted the effects of a "very benign growth inflation environment" in the United States and an incremental tapering of quantitative easing by the Federal Reserve. "I think that is very bullish for equities," she said.


The U.S. would likely see better capital expenditures, decent growth and strong balance sheets, Maisonneuve added.


Emerging markets were also worth a look, she said, in part because they have been oversold, hold attractive valuations and promise solid global growth.


"I became more positive on emerging markets a couple of months ago when valuations were really very, very cheap," Maisonneuve said.


Top emerging markets on her list were IndonesiaBrazilThailand and Mexico.


"The reason why those markets were beaten up, if you remember during the crisis when there was basically no yield to be had anywhere, a lot of money went into the emerging markets to search for yield," she said. "When the noise or the seed of normalization or tapering came, a lot of that money came out, putting pressure on currencies and those markets. And clearly, countries that had a current account deficit suffered more."


A good time to invest in emerging markets could come on a dip, such as if China releases weak economic data or an escalation of the political situation in Russia, Maisonneuve said.


"If that was happening, I think this would be a fantastic entry point for people who do not have emerging markets or are very underweight," she said. "Ultimately, they will generate growth and good returns because they are so cheap."


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10Comments
Mar 28, 2014 3:04PM
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I'm 65 years old and I'm hanging in there with the be on equities - not enough yield on bonds.
Mar 29, 2014 12:38PM
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Holy Crap that's the kiss of death!
Mar 28, 2014 4:01PM
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Don't you just wish you could remember her words in about 6 months and write the article for MSN on how wrong she really was and was just doing an advertising piece to suck in more little guys?
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there is no way the US stock market will increase 10 to 15 percent this year when the Fed Reserve has said they have created bubbles and those bubbles are ready to burst because of all the QEx's they have been pumping into the market.

Basically the real US economy has gotten weaker since 2008 and the fact that 10,000,000 more babyboomers are retiring this year will add to the already stressed stock and bond markets.

There is now more money flowing out of the stock and bond markets then is flowing into them

THIS IS GOING TO MEAN LOWER AND LOWER PRICES FOR THE STOCK MARKET AND HIGHER AND HIGHER YIELDS FOR BONDS going forward.

Mar 29, 2014 12:57PM
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Take me back to old Virginie.....


edited+++ for Virginie, is who the article was about...

I thought it was funny, lighten up...

Mar 28, 2014 6:03PM
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"The prime word is- could."

Absolutely. The guy forecasting it has bad dreams about returning to his fry cook job at the All You Can Eat Warren Buffett and Diner in Trailer Park, Florida. Financial is overdone, the collapse has already begun. Bonds-- they make good kindling, so hold on to them for next year's polar vortex. 
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