Sources: UBS, Morgan Stanley, Smithers & Co., Bloomberg LP
Among market strategists at sell-side brokerages, UBS' Jonathan Golub is the most bullish. He predicts a year-end S&P 500 close of 1,525, because central bank intervention will result in an upturn resembling previous market reactions.
Two broad-market metrics used by value investors to measure stock market valuation are Tobin's Q ratio and the cyclically adjusted price-earnings ratio. Flow of Funds data used to calculate Tobin's Q ratio (released Sept. 20) reveal that both ratios remained well above their long-term averages through June 30.
Morgan Stanley's Adam Parker currently has the most bearish outlook on where the S&P 500 will close in 2012: 1,167. He contends that QE3 has the potential to result in a 3% to 4% market increase by the end of the year. However, headwinds in the form of downward corporate earnings revisions and deteriorating economic headlines could more than offset potential gains from the Fed's actions.