BULLETIN: Strategy 09-S-271 December 22, 2009 Page1/8

Page 1/2

The 2010 Outlooks

It is that time of year again when Wall Street publishes
their outlooks for next year. Nine major firms did not
disappoint, collectively publishing over 3,500 pages of US Market & Economic Targets
2010 predictions. 1,400

While other outlooks will certainly be released after this 1,350

point, some consensus has emerged for 2010. DB

1,300 JPM
• Strategists, on average, see the S&P 500

S&P 500 Index Target

BAC
gaining 9.5% to 1,222 and earning $76 per
1,250 GS UBS
share in 2010
1,200 MS
• Despite the view that the S&P 500 will gain over
9%, the consensus is to "underweight" or "bench-
mark" US equities 1,150 C
BCS CS
• Oil will rally slightly to $80 1,100
Size =
GDP Growth Estimate
• Gold will rally to $1,213 1,050
$64 $66 $68 $70 $72 $74 $76 $78 $80 $82 $84

• The Dollar vs the Euro will end 2010 at 1.45 S&P 500 EPS Estimate

• The US economy is expected to grow 3.1%

S&P 500 GDP %
• The FRB will not hike interest rates until at least Target EPS Growth
mid-2010 BoA / Merrill Lynch 1,275 $73 3.2%
Barclays 1,120 $66 3.5%
Citigroup 1,150 $73 2.2%
On pages two through four we summarize the macro
Credit Suisse 1,125 $76 2.7%
outlooks. Page five covers the view towards the US, six Deutsche Bank 1,325 $81 4.9%
and seven the world abroad, while key commodities are Goldman Sachs 1,250 $76 2.1%
reviewed on page eight. JPMorgan 1,300 $80 3.5%
Morgan Stanley 1,200 $77 2.9%
UBS 1,250 $80 2.6%
Kevin Pleines
203-341-0833 Average 1,222 $76 3.1%

© Copyright 2009, Birinyi Associates, Inc.

Birinyi Associates, Inc. The information herein was obtained from sources which Birinyi Associates, Inc.
believes reliable, but we do not guarantee its accuracy. Neither the information, nor any
opinion expressed, constitutes a solicitation of the purchase or sale or any securities or
commodities.
BULLETIN: Strategy
Macro View
Bank of America/
Merrill Lynch
10 Themes for 2010:
1. Government balance sheet risk
2. Rising taxation
3. Alternative yield strategies
4. Financial sector rehabilitation
5. Corporate cash flow beneficiaries
6. Rising global growth
7. Emerging market consumers
8. Commodity price inflation
9. Return of active management
10. Alternative energy
Top Three Investment Ideas:
1. Asia & Emerging-Market consumer (large-cap
EM financial and consumer related stocks & US
and Japanese multinationals)
2. Tightening plays as markets tighten by raising
the price of commodities, the yield of gov't bonds,
value of EM currencies: long global banks (in-
cluding Japan) and large cap energy stocks
3. Hedge tail risks such as bubbles in China and
gold, a double-dip, trade protectionism or a US
dollar crisis by buying puts on volatility using
options on China H-shares and S&P 500 financials
Birinyi Associates, Inc.
09-S-271
Goldman Sachs
Investment Recommendations:
Best Ideas for 2010
1. Buy US companies that generate a high
percentage of sales from BRICS
2. Invest in companies with high operating lever-
age that currently run at the bottom of their
margin cycles
3. Buy cyclical sectors now defensives later
4. Buy stocks high Sharpe ratio
5. Looking ahead to 2H: free cash flow and
dividend growth
December 22, 2009 Page2/8
Page 2/2
UBS Morgan Stanley
Key Themes for 2010: 10 Trades for 2010:
1. Investment style: re-rating limited, earnings 1. Overweight equities vs credit vs government
and yield are key bonds
2. Equity regions: Emerging Markets are well 2. Overweight Large Cap Growth
positioned
3. Overweight non-ferrous vs ferrous commod-
3. Bonds: not the place to be ity equities / Overweight agri chemicals
4. REITs: Bottoming Asset Value Cycle 4. Overweight global tobacco - Japan, US &
Europe
5. Commodities: More moderate returns
5. Overweight Japanese industrials & exporters
6. Buy Euro pharma over US pharma
7. Overweight Consumer Non-Cyclicals vs
Cyclicals (Staples over Discretionary)
8. Overweight US large cap vs small caps
9. Overweight global autos/auto components
10. Underweight financials - (European & UK)
© Copyright 2009, Birinyi Associates, Inc.
The information herein was obtained from sources which Birinyi Associates, Inc.
believes reliable, but we do not guarantee its accuracy. Neither the information, nor any
opinion expressed, constitutes a solicitation of the purchase or sale or any securities or
commodities.
BULLETIN: Strategy
Macro View
Deutsche Bank
Seven Trades for 2010:
1. Signficant recovery upside but also downside
risks: best of both worlds high-quality cheap
stocks on normalized earnings
2. M&A up cycle beginning: buy aquisition targets
3. Rising rates: long brokers and short REITs
4. Stronger US dollar: long retailers and short
energy
5. Overweight US versus Emerging Markets: long
US financials and short EM financials
6. Flows follow: stay with value over growth
7. Uncertainty to decline: short S&P 500 12m
forward volatility
Birinyi Associates, Inc.
09-S-271 December 22, 2009
Richard Bernstein
Capital Management
10 Predictions for 2010:
1. Stock and bond market returns in the US will
again be positive
2. The US dollar is likely to meaningfully appreciate
once market-driven short term rates begin to rise
3. US dollar "carry trades" could get killed as 2010
progresses and the US dollar appreciates
4. The Fed will spend the second half of the year
trying to catch up to, and flatten, the yield curve
5. Corporate profits are likely to explode to the
upside during 2010
6. Employment in the US will probably continue to
improve
7. Treasuries will probaly underperform stocks
8. Small cap value, I think, will be the best perform-
ing size/style segment
9. Financial regulation will progress, but the bull
market will probably aid politicians' "forgetfulness"
10. I think Democrats will do better in the 2010 mid-
term elections than people currently think they will
Page3/8
Page 3/2
JPMorgan
Across JPM Research our Top 10 Trade
Recommendations for 2010:
1. long EM equities
2. short USD versus EMFX
3. short USD versus EUR and JPY
4. short US agencies and MBS outright
5. long US HY outright
6. overweight US HG and EM external debt versus
UST
7. long EM corporate credit
8. overweight cyclicals within equities
9. long lower-tier II bank bonds outright and
versus government debt
10. long AAA CMBS/RMBS and A-rated CLOs
© Copyright 2009, Birinyi Associates, Inc.
The information herein was obtained from sources which Birinyi Associates, Inc.
believes reliable, but we do not guarantee its accuracy. Neither the information, nor any
opinion expressed, constitutes a solicitation of the purchase or sale or any securities or
commodities.
BULLETIN: Strategy 09-S-271 December 22, 2009 Page4/8
Page 4/2

Macro View
Credit Suisse
Estimates 12% (S&P 1,220) rally in global stocks
by mid-2010, but expects a renewed bear-market
to emerge in late 2010
Overall, we have a bar-bell strategy - with a focus
on corporate spending plays and minerals and
mining on the other side, cheap indirect emerging
market exposure via the consumer staples on the
other
We like quality high growth, high dividend yield,
positive earnings revisions and big cap. We avoid
high financial leverage
Bank of America/
Merrill Lynch
“Underweight” US vs global regions
Long European equities, Asia, and emerging
markets, Short US and Japanese equities
Developed markets are in a cyclical bull market
and Emerging-Markets are in a structural bull
market
A major correction at some stage in 2010 is
inevitable
No "double-dip" expected
Barclays
Expected path for equities next year is a sharp
rally in Q1 followed by sideways corrective
behavior in Q2 and Q3 investors grapple with
policy shifts
Predicts S&P 500 will fall to 990 in 1H 2010 then
rebound to end the year
Immediate term, biased to stay long equities,
shifting into more defensive areas as quarter
progresses
Expects the first Fed funds rate hike in Sept-10
Morgan Stanley
US equities will probably will reach a peak early
in 2010, before hitting a trough in the second or
third quarter
Earnings growth will have to be sales driven
Neutral stance on North America & "under-
weight," on Europe and the UK
Macro: backdrop: Triple "C" Equity Expectation
- Cautions, Convergence, Capricious

Goldman Sachs JPMorgan Citigroup Deutsche Bank

Stock rally to continue in a low rate world
Buy cyclicals now, own defensives later in the
year
S&P 500 to rally to 1,300 in 1H then fall to 1,250
by year-end
Forecast Fed target rate unchanged until 2012
Strong first half in 2010 followed by policy risks
in the second half
Investors are too pessimistic about US profit
outlook
Favor pro-cyclical groups - but higher quality
Favor high beta
Best performance for stocks in 1H10, with per-
haps little gain after
Fairly solid recovery is likely in 2010-11 Our fundamental thesis remains that after a
corporate over-contraction, a necessary ex-
Global equities are moving out of the twilight zone pansion to meet existing demand has created,
and into recovery phase and will maintain pressures for, a cyclical re-
covery in 2010
Favor EM, CEEMEA as a cheap contrarian play,
prefer LatAm to Asia & US remains "under-
weight"
Favor a balance between earning momentum
(which favors cyclicals) and valuation (which
favors defensives)

Fed rates probably on hold until 1H11 US equities may spike abouve year-end target of
1,100 during earlier parts in the year and back off

© Copyright 2009, Birinyi Associates, Inc.

Birinyi Associates, Inc. The information herein was obtained from sources which Birinyi Associates, Inc.
believes reliable, but we do not guarantee its accuracy. Neither the information, nor any
opinion expressed, constitutes a solicitation of the purchase or sale or any securities or
commodities.
BULLETIN: Strategy 09-S-271 December 22, 2009 Page5/8
Page 5/2

2010 Outlook: US Summary

S&P 500 Year-End Target & EPS
S&P 500 2010 Price Target
S&P 500 EPS in 2010

1,400 $90

1,300
$80
1,200

$70
1,100

1,000 $60

900
$50
800
$40
700

600 $30

Average
GS

MS
BAC

BCS

CS

DB

UBS
RBC
C

JPM
BAC

BCS

MS
HSBC

RBC

Average
JPM
C

CS

DB

GS

UBS
1,222 $76

US Sector Weightings GDP Growth Next Year

Average - 3.1%
Goldman Sachs

Morgan Stanley
Deutsche Bank

Merrill Lynch
JP Morgan
Citigroup
Barclays

2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

UBS

Consumer Disc - = + - + - - -
Consumer Stap - = = = - = + +
Energy + + - + + + = + First Fed Rate Hike
Financials - + + = + + - =
Health Care + + = - = - + =
Industrials + - + = + + = -
Materials - - - + + = + = MS & UBS BCS C BAC JPM GS
Technology + = + + + = = +
Telecomm - = - - = - = -
Utilities - - - - - = - =
Jan-10 Apr-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11

© Copyright 2009, Birinyi Associates, Inc.

Birinyi Associates, Inc. The information herein was obtained from sources which Birinyi Associates, Inc.
believes reliable, but we do not guarantee its accuracy. Neither the information, nor any
opinion expressed, constitutes a solicitation of the purchase or sale or any securities or
commodities.
BULLETIN: Strategy 09-S-271 December 22, 2009 Page6/8
Page 6/2

2010: Looking Abroad - GDP 2010 GDP Growth Estimates (%)

Goldman Sachs

Morgan Stanley
Deutsche Bank
GDP Growth Heat Map

Credit Suisse
BNP Paribas

Merrill Lynch
JP Morgan
Citigroup

Average
Barclays

HSBC

UBS
Asia & Pacific
Australia 2.8 3.7 3.3 2.1 3.3 2.9 2.9 1.8 2.8
China 9.6 9.6 9.8 10.5 7.8 11.9 9.5 9.5 10.1 10.0 9.0 9.8
India 8.2 6.2 7.8 7.9 7.8 7.5 7.6 6.6 9.0 7.6
Indonesia 6.0 5.2 5.7 5.2 5.3 4.8 6.0 5.5
Japan 1.7 1.5 1.5 1.4 2.2 3.5 0.8 1.8 1.8
Malaysia 5.0 5.0 5.5 4.2 6.3 5.0 6.0 5.3
New Zealand 2.5 2.7 2.8 2.0 2.5
Philippines 4.3 4.3 4.2 5.0 5.0 4.6
Singapore 6.5 5.5 6.5 5.8 5.3 6.5 7.0 6.2
South Korea 5.0 5.4 4.7 3.7 3.6 4.7 4.6 4.5
Taiwan 6.0 5.8 3.3 4.0 4.4 5.8 4.4 4.8
Thailand 4.5 4.2 6.1 6.0 5.2
Europe & Eastern Europe
Czech Rep. 1.9 1.3 1.5 2.5 1.1 1.5 1.6
Europe/Euro 1.5 1.3 1.5 1.8 2.6 1.5 2.5 2.2 0.5 2.4 1.8
France 1.4 1.5 1.8 1.2 1.8 2.7 1.9 0.5 2.3 1.7
= < -5% Growth
= < 0% Growth Germany 2.4 1.6 2.0 2.2 2.5 3.6 1.2 1.0 2.1 2.1
= > 0% Growth Hungary 0.3 0.4 0.5 1.0 0.2 -0.1 0.4
= > 5% Growth
Italy 1.2 0.8 1.4 0.8 1.3 1.5 1.8 0.7 1.7 1.2
= No Coverage
Poland 3.0 2.2 2.6 3.2 3.5 2.4 2.8
Russia 4.3 3.8 3.0 4.5 2.5 5.0 5.0 2.5 5.5 4.0
Spain -0.5 0.0 0.1 -0.3 0.1 -0.9 -0.2 -0.2
U.K 1.5 2.0 1.5 1.8 3.0 1.9 1.7 1.6 1.2 1.5 1.8 1.8
Middle East & Africa
South Africa 2.4 2.6 2.6 3.0 3.2 2.8 2.7 2.8
Turkey 3.8 3.5 4.2 5.5 5.0 4.5 2.4 4.1
North America
Canada 3.4 2.1 2.5 2.8 2.1 2.4 2.5 2.9 2.6
US 3.5 2.2 2.7 3.3 2.1 2.9 3.5 3.2 2.9 2.6 2.9

S. America/Latin America
Argentina 3.5 3.2 2.0 2.0 4.0 3.9 2.2 1.0 2.9 2.7
Brazil 5.3 4.1 5.0 4.0 5.8 6.2 5.3 4.8 4.5 5.0
Chile 4.6 5.5 3.5 3.0 5.0 3.8 3.8 4.0 4.2
Colombia 3.4 2.4 2.5 2.0 3.0 3.0 4.1 3.8 3.0
Mexico 5.1 4.0 3.6 2.3 4.2 3.5 2.1 2.4 2.5 3.3
Peru 3.9 5.0 5.4 4.1 4.9 4.5 4.6
Venezuela 2.4 -2.0 -1.7 2.6 2.5 0.6 0.0 -2.1 0.3

© Copyright 2009, Birinyi Associates, Inc.

Birinyi Associates, Inc. The information herein was obtained from sources which Birinyi Associates, Inc.
believes reliable, but we do not guarantee its accuracy. Neither the information, nor any
opinion expressed, constitutes a solicitation of the purchase or sale or any securities or
commodities.
BULLETIN: Strategy 09-S-271 December 22, 2009 Page7/8
Page 7/2

Looking Abroad: Equity Market Weightings

Goldman Sachs

Morgan Stanley
Deutsche Bank
Credit Suisse
BNP Paribas

Merrill Lynch
JP Morgan
Citigroup
Leading/Lagging Equity Markets

HSBC

UBS
Top "Overweights" Top "Underweights"
Asia & Pacific
Brazil Australia Asia ex. Japan + + + - + =
China Malaysia Australia - - -
India Israel China = + = + + - + + =
Taiwan Malaysia India + + + = + + - + +
Indonesia + + + = = =
Indonesia Peru
Japan = = = + -
Malaysia - - - +
Philippines + - - +
Singapore + + + - = -
South Korea = + + + = - =
Taiwan + + - + + + + - = +
Thailand + - - = -
US Recommended Weight vs Global Markets
Emerging Markets
Emerging Mkts + + + + + +
Europe & Eastern Europe
Morgan Stanley
Deutsche Bank

Europe + + + + - = + Overweight
Credit Suisse

- Underweight
Merrill Lynch

Czech Rep. + + = +
= Equal Weight
Hungary - - = +
Citigroup

Poland + = = = +
Russia + = - + + + +
UBS

United Kingdom + + + + - =
US vs Int'l Markets - - + - = = Middle East & Africa
Egypt + + -
Israel - + - -
Pakistan + =
South Africa + - = - +
Turkey = = + + - =
S. America/Latin America
Argentina - =
Brazil + + + + = + = =
Chile + = - - -
Colombia = - -
Mexico - + + + - = -
Peru = - -

© Copyright 2009, Birinyi Associates, Inc.

Birinyi Associates, Inc. The information herein was obtained from sources which Birinyi Associates, Inc.
believes reliable, but we do not guarantee its accuracy. Neither the information, nor any
opinion expressed, constitutes a solicitation of the purchase or sale or any securities or
commodities.
BULLETIN: Strategy 09-S-271 December 22, 2009 Page8/8
Page 8/2

Commodities End-2010 End-2010 End-2010

Oil Forecast Gold Forecast EUR/USD
2010 Forecasts
$100 $1,600 $1.65
Euro vs Copper Gold Crude Oil
USD ($/metric ton) ($/oz) ($/barrel)
BoA / Merrill Lynch 1.28 7,125 1,500 85 $95 GS
$1.60 C
Barclays 1.45 6,563 1,088 85
Citigroup 1.59 7,500 1,200 84 $1,500
Credit Suisse 1.54 - - 70 $90
BCS BAC/ML $1.55
Deutsche Bank 1.40 5,732 1,150 65 CS
Goldman Sachs 1.35 - - 95 MS
JPMorgan 1.50 7,100 1,288 78 $85 C UBS
Morgan Stanley - - - 85 BAC/ML $1,400 $1.50 JPM
UBS 1.50 - 1,050 75
$80 Average
BCS
Average $1.45 $6,804 $1,213 $80 JPM $1.45 Average
$75 UBS $1,300 Current
Current JPM
$1.40 DB
$70 CS
Average
$1,200 C $1.35 GS
$65 DB
DB
$60 $1.30
BCS BAC/ML
$1,100
Current
$55 $1.25
UBS

$50 $1,000 $1.20

© Copyright 2009, Birinyi Associates, Inc.

Birinyi Associates, Inc. The information herein was obtained from sources which Birinyi Associates, Inc.
believes reliable, but we do not guarantee its accuracy. Neither the information, nor any
opinion expressed, constitutes a solicitation of the purchase or sale or any securities or
commodities.