"Three main factors are at play to make 2007 a positive year for the equity market," Mr. Acampora said. "Historically, the third year of a president's term in office is the best market environment of all four years. Second, the market's exceptional upside thrust in late 2006 has characteristics typically seen in the early stages of a long-term advance. Third, the market's 2006 correction presented investors with new and diverse stock leadership in an increasing rotation of stocks. This gives investors a more democratic list of potential new buy ideas, including old-line blue chips and formerly under-owned, under-loved names.
"While it is rare for a bull market to extend beyond four years, we believe that 2007 will provide us an opportunity to celebrate the bull's fifth birthday with further gains," he continued. "We have not heard much from the blue chips in this current bull run; perhaps 2007 will be their time to take the helm."
Other highlights from the Knight Research Annual Forecast for 2007 include the following:
* Expect normal corrections/hesitations early in what will be a positive
year
* Impressive long-term chart patterns support emerging new names
* Telecomm, Information Technology and Financials are favored S&P 500
sectors
* Value styles remain relatively dominant over growth
* Current note and bond rallies will continue over the year
* Energy prices should continue to hold back aggregate commodity price
indices during 2007
* Agricultural prices remain strong, but several components could be
reaching their peaks
* U.S. Dollar Index is expected to test major support in the 78 to 80 area
* Majority of foreign markets still look healthy with upside potential for
most indices
For a copy of the Knight Research Annual Forecast for 2007, please contact your Knight Sales Trader or Knight Research Sales: Andee Hidalgo, 201-356-1751, ahidalgo@knight.com, or Jill Schurtz, 201-356-1750, jschurtz@knight.com. Media interested in receiving the forecast or speaking with Ralph Acampora should contact Margaret Wyrwas, 201-557-6954, mwyrwas@knight.com, or Greta Morley, 201-557-6948, gmorley@knight.com.
Knight Research is part of Knight Equity Markets, L.P.
About Knight
Knight Capital Group, Inc. (Nasdaq: NITE) is a leading financial services firm that provides comprehensive trade execution solutions and asset management services. Our Asset Management business, Deephaven Capital Management, is a global multi-strategy alternative investment manager focused on delivering attractive risk-adjusted returns with low correlation to the broader markets for institutions and private clients. Our Global Markets business provides a broad range of customized trade execution products and services across multiple asset classes for broker-dealers, institutions and issuer companies. We continually apply knowledge and innovation to the trading and asset management processes to build lasting client partnerships through consistent performance and superior client service. More information about Knight can be found at http://www.knight.com.
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