Analysts' optimism looks overdone

A recent survey of US analysts revealed a consensus forecast of a 10% gain for the S&P 500 in 2008. And in a poll of UK fund managers, all predicted gains for the FTSE. What planet are they on?

Even though the US looks set for recession, due to the deflating housing bubble and tighter credit conditions, Wall Street is unfazed, says Kopin Tan in Barron's.

A poll of 12 US strategists reveals a consensus forecast for a 10% gain in the S&P 500 index in 2008. They expect the US to avoid a recession, with global growth supporting the domestic economy, and lower interest rates to bolster profits and equities.

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