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Knight Cap: Stocks Set to Slingshot Higher

According to Knight Capital managing director Peter Kenny, concerns over Q4 earnings are wildly  overdone. Not only that, he sees stocks moving up to 5% higher from here until the next round of debt ceiling debates start kicking in next month.

Kenny says Q4 earnings will not be as “ugly as many people are projecting.” Given that some of those people are corporate CEOs, the burden of proof for supporting this statement falls to Kenny. His bullish thesis stems from the following:

  • The U.S. hit an earnings trough in the middle or back end of 2012
  • GDP estimates for 2013 are strong
  • There’s still money on the sidelines waiting to be poured into stocks either on dips or to chase stocks higher if that dip never happens

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